Following the decision of the US in May 2018 to abandon its commitment to the JCPOA, the Joint Comprehensive Plan of Action to monitor and regulate Iran’s nuclear energy programme, Iranian businesses fear that they are straight back to square one.
US president Donald Trump gave a six-month deadline for all foreign companies and banks working directly or indirectly with Iran to cut their cooperation with the country. The immediate result has been a 100 per cent devaluation of the Iranian rial against the US dollar.
“Such an enormous fall in the value of the national currency has disturbed all the calculations, plans and business decisions made by traders,” says Alireza Emami, CEO of Tehran-based Zarrin Group. “To control the situation, the Iranian government is introducing new rules and regulations concerning classification, the prioritising of imported goods, the application for import certificates, the banking system and transfers, and the buying and selling of foreign currencies.”
According to Emami, a major issue concerns the consistency of such government plans and statements. “Since the US exited the JCPOA, many of the above regulations have gone through several changes, creating instability and making it difficult for traders and importers to make plans,” he says.
Although president Trump has given a six-month deadline for companies to exit the Iranian market, many foreign companies have already gone, according to reports, while many others are planning to cut their business relations and leave as soon as possible.
“Everything screeched to a halt when Trump made the announcement,” says one Iranian importer. “And now everything is getting more and more expensive. There is huge frustration throughout the country. In six months, people’s life savings have been decimated.”
Check out the full article in the September issue of Eurofruit.