VW to stop doing business in Iran: Bloomberg

A car with the Volkswagen VW logo badge is seen on display at the North American International Auto Show in Detroit, Michigan, US, January 16, 2018. (File/Reuters)
Updated 20 September 2018
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VW to stop doing business in Iran: Bloomberg

  • VW will still be able to do some business in Iran under a humanitarian exception
  • VW has scrapped plans it announced in July last year to sell cars in Iran for the first time in 17 years

WASHINGTON: Volkswagen has bowed to American pressure stemming from the US rejection of the multi-party nuclear deal and will end almost all business in Iran, Bloomberg News reported Wednesday.
The accord was reached Tuesday after weeks of talks between the German auto giant and the administration of President Donald Trump, said Richard Grenell, the US Ambassador to Germany, according to Bloomberg.
VW will still be able to do some business in Iran under a humanitarian exception, Bloomberg added.
In May, Trump pulled the US out of the deal it reached with Iran and five other countries in 2015. That accord lifted sanctions against Tehran in exchange for restrictions on its nuclear program.
Now, the US is reimposing those sanctions.
Bloomberg said VW has scrapped plans it announced in July last year to sell cars in Iran for the first time in 17 years.


North Korea made $120 million a year from joint factory park: report

Updated 27 min 12 sec ago
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North Korea made $120 million a year from joint factory park: report

  • The Kaesong Industrial Complex was one of the most visible signs of reconciliation that followed the first inter-Korean summit in 2000
  • Around 55,000 North Korean workers churn out products ranging from watches to clothes for some 125 South Korean companies

SEOUL: North Korea raked in more than $120 million a year from a symbolic cross-border industrial zone that Pyongyang and Seoul are pushing to re-open as part of nuclear negotiations, a report said Monday.
The Kaesong Industrial Complex — where around 55,000 North Korean workers churned out products ranging from watches to clothes for some 125 South Korean companies — was one of the most visible signs of reconciliation that followed the first inter-Korean summit in 2000.
But it was shuttered by the South’s then-conservative government in 2016 in response to a nuclear test and missile launches by the North, saying profits from Kaesong were funding Pyongyang’s provocations.
The South’s current President Moon Jae-in has dangled re-opening the complex as an incentive for Pyongyang to engage in denuclearization talks, but doing so is complicated by the web of international sanctions imposed on the North over its weapons programs.
At their Pyongyang summit in September, Moon and North Korean leader Kim Jong Un agreed to “normalize” operations at Kaesong when conditions were “ripe,” but negotiations between Pyongyang and Washington are now deadlocked and Northern media have pressed the South to implement joint economic projects.
The International Crisis Group called on Monday for the complex to be reopened with “a modest deal involving sanctions relief.”
Doing so would create “much needed momentum for stalled peace talks and serve as a reminder to both North and South Korea of the benefits of building a sustainable peace on the peninsula,” it added in a statement.
The factory zone gave the North foreign investment in its infrastructure, employment for its people and “much-needed revenue in hard currency,” it said in a report, while the South Korean businesses involved enjoyed cheap but high-quality labor — wages in China were 2.9 times higher in 2014.
In 2015, the year before it closed, South Korean firms paid the North around $123 million for their workers, ICG calculated.
The North taxed the sums at 30 percent and paid the workers 70 percent of the remainder in essential foodstuffs and coupons for state-run shops, the report said, citing the firms in Kaesong and the South’s unification ministry.
The rest was paid “in local currency at an artificially low official exchange rate,” it added.
Currently the North’s official exchange rate is around 80 times lower than the market rate. If a similar ratio applied to the Kaesong workers, they will have received in cash only around one quarter of one percent of the value paid to the North for their services, AFP calculates.
Profits from Kaesong were equivalent to only about 10 percent of what the North made from coal exports to China, ICG said, but “were nevertheless important... to a regime that needed all the cash it could get.”
“In this sense, reopening Kaesong would unquestionably be a concession to the North,” it added.