By Dr. David Ramin Jalilvand for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.
Since the signing and implementation of the Joint Comprehensive Plan of Action (JCPOA), European businesses have shown great interest in re-entering Iran. Trade between Iran and the EU has already notably picked up.
Last year, European exports to Iran amounted to 8.3 billion euros ($8.9 billion), approximately 28% higher than the year before. Meanwhile, European imports grew by some 345%, amounting to 5.5 billion euros ($5.8 billion) — mostly driven by largely resumed oil shipments from Iran.
But despite the uptick in trade, economic relations between Iran and the EU are still below pre-sanctions levels. In 2011, before the imposition of stringent nuclear-related sanctions including the previous EU oil embargo, EU exports to Iran amounted to more than 10 billion euros ($10.7 billion), while imports were as high as almost 18 billion euros ($19.2 billion).
Europeans eager to return to Iran are facing two main obstacles. For one, huge challenges remain within Iran, including a poor regulatory environment and standards able to support international trade, insufficient managerial skills in many local companies, widespread corruption, and questions concerning the rule of law.
European officials and business leaders also appear particularly worried by uncertainty regarding the future course of US policy. To decision-makers in Europe, the question of paramount concern is whether the administration of US President Donald Trump may go after European firms engaged in the Iranian economy.
Before the signing of the nuclear deal in 2015, the administration of US President Barack Obama had applied sanctions against non-US individuals and entities commercially engaged with Iran. These secondary sanctions resulted in heavy fines for a series of banks and businesses from Europe.