Economic Impact Of The IRAN Nuclear Deal

Wednesday, February 10, 2016

After years of negotiations the international community finally lifted its sanctions on Iran in mid-January. This clears the way for a return to the global stage of the world’s 28th largest economy.

Leaving aside the political and security implications of the deal, Dun&Bradstreet analyzed what the outcome means over the next few years for Iran, the region and the world in terms of economic and commercial impacts.

About the leaving of the sanctions it has to be noted that these can be reapplied at any time if Iran is found to be in contravention of the agreement. Sanctions would then be reapplied for at least ten years, with a possible extension for a further five years. In addition, a number of sanctions remain in place, including a UN arms embargo for the next five years and those against persons and companies with links to the Revolutionary Guards.

Although the Iranian economy and businesses will undoubtedly benefit from the lifting of sanctions, we must caution that a number of factors will curtail potential business activity. For example, in relation to the hydrocarbon sector, Tehran’s latest contracts do not meet international norms, although they are better than previous versions.

Then, the business environment remains challenging: corruption is endemic and it remains though to make trade agreements with Iranian companies. Finally, much business activity is controlled by Revolutionary Guards, creating an uneven playing field, not just for foreign companies but also for domestic companies without links to the political establishment.

Join the CRIBIS Community and freely download the Special Briefing: Economic Impact of the Iran Nuclear Deal report.

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