US Iran sanctions move hits European companies

European companies were quick to pull back after the August US announcement. (AFP)
Updated 03 November 2018

US Iran sanctions move hits European companies

  • EU insists it will stick by the nuclear accord to allow trade to continue with Iran
  • Many European companies have already cut back its presence

PARIS: US President Donald Trump’s decision to pull the United States out of the 2015 nuclear accord with Iran and reimpose a raft of sanctions puts European businesses on the spot.
While the European Union insists it will stick by the nuclear accord to allow trade to continue with Iran, European companies are wary of being caught out by the US sanctions regime and many have already cut back their presence.
Here is an overview of how firms could be affected:
The sanctions introduced in August spooked the major automakers who were already cautious about their future in Iran and mindful of their much bigger business interests in the United States.
Germany’s Daimler, which was teaming up with two Iranian firms to assemble Mercedes-Benz trucks, said it had decided against going ahead.
Volkswagen had said last year it planned to resume business after a 17-year break but was very guarded in response to the latest US decision.
VW “conforms with all the applicable national and international laws and regulations concerning exports,” a spokesman said.
French automakers Renault and PSA, who make nearly half the cars sold in Iran, were cautious.
PSA, behind the Peugeot, Citroen and Opel brands, said in June it was preparing to suspend activities in Iran.
Renault says it intends to keep its activities in Iran but stands ready “to reduce the scale very sharply” if need be.
Aviation saw large contracts reached following the 2015 nuclear accord as Iran set about modernizing an aging fleet.
Airbus booked deals for 100 jets and was looking forward to many more.
However, the potential loss of business in Iran would not weigh overly heavily on Airbus given its total outstanding order book of some 7,168 planes at end-June.
Oil is the key issue with global implications for all concerned as Washington aims to cut off Iran’s key source of foreign income.
French energy giant Total announced in August it was pulling out of a massive natural gas project.
Italian energy giant ENI meanwhile has a contract to take two million barrels of oil per month which it will not renew after it finishes this year.
German engineering giant Siemens signed a contract in 2016 to supply gas turbines to Iranian company Mapna.
A spokesman told AFP the company “will take the appropriate measures to bring its affairs into conformity with the multilateral framework concerning Iran.”
Italy stands to lose most in these sectors, national railway operator Ferrovie dello Stato Italiano having signed a deal in 2017 to build a high-speed line linking Qom to Arak in northern Iran.
Shipmaker Fincantieri, engineering firm Maire Tecnimont and gas boiler maker Immergas all signed a string of deals with Iran which are also threatened.
Italy was Iran’s largest European trade partner in 2017, with its exports rising 12.5 percent to 1.7 billion euros.
Iran is potentially a major tourist destination but European companies were quick to pull back after the August US announcement.
British Airways and Air France halted services in September, saying the flights were not commercially viable.
German carrier Lufthansa, Austrian Airlines and Alitalia for the moment continue flights to Tehran.
French hotel chain AccorHotels, which opened an establishment in Iran in 2015, declined to comment on its plans for the future.
Spain’s Melia Hotels International chain, which signed a 2016 deal to run a five star hotel in Iran, the Gran Melia Ghoo, said in November it was still going ahead.

‘Disappointed’ billionaire brothers urge new talks on Saudi bid for Newcastle FC

Updated 03 August 2020

‘Disappointed’ billionaire brothers urge new talks on Saudi bid for Newcastle FC

  • The Reuben brothers want to buy 10 per cent of the club as part of PIF takeover
  • Brothers remain 'totally supportive' of the deal should there be a way forward

DUBAI: Another big financial backer of the £300 million ($390 million) bid for Newcastle United football club has come out in favor of a takeover led by Saudi Arabia’s Public Investment Fund.

The Reuben brothers, multibillionaire businessmen who want to buy 10 per cent of the club, said on Monday they were “very disappointed” when the bid was withdrawn late last week after months of stalling by the Premier League in England.

“We would welcome any resurrection of talks and progress with the Premier League and are aware that the Reuben brothers remain totally supportive of the deal should there be a way forward,” said a statement from their company, Arena Racing.

The brothers’ renewed support for the deal will raise the pressure on Richard Masters, the Premier League chief executive, who has remained silent since the takeover offer was withdrawn last week.

PIF made no secret of its disappointment and frustration that the Premier League — which has the duty to approve or reject a takeover of a member club  — has reached no decision since contracts were exchanged on the deal in April that would give the Saudi sovereign wealth fund 80 per cent of the 128-year-old club

Amanda Staveley, the British financier who has been at the heart of the deal and would have bought the remaining 10 per cent, also wants to see the deal revived.

The Reuben brothers, who already run two horseracing courses in the northeast of England, said: “We were planning on creating one of the premier sporting hubs in the UK, undertaking development work that is vital for the region and enjoying valuable synergies with the football club.

“We continue to hope that those exciting plans are not in vain.”