France and Iran have signed 15 billion euros worth of business deals as President Rouhani continues his European post-sanctions shopping trip.
The agreements cover aviation, carmaking, energy, shipping, infrastructure, railways, health and agriculture though most have not yet been finalised and French banks remain wary of doing business with Iran. There is also an agreement between French export-credit group Coface and the Iranian central bank.
Speaking at a business forum hosted by France’s main industry body Medef, Carlos Tavares, the chief executive of PSA Peugeot Citroen, detailed the planned modernisation of a Peugeot car plant in Tehran: “We are very positive and very happy to sign this agreement. We expect that from late 2017, we will be able to introduce three brand new products with new technology, with updated technology to support our Iranian customers and we will make sure that we invest the appropriate capacity up to 200,000 cars a year in our plan with our partner Iran Khodro.”
Iran says it wants to buy over 100 Airbus planes to update its ageing fleet, including a dozen A380 superjumbos. Exactly what stage the Airbus deal was at remained unclear on Thursday, however, amid scepticism over how far and how fast western firms can get into Iran.
French officials said Iran was putting the finishing touches to the Airbus deal, and Iran earlier this week gave estimates of up to 127 Airbus planes, but Iranian Transport Minister Abbas Akhoundi declined to give further details and sources close to the discussions said technical talks were continuing.
Total has reportedly signed a memorandum of understanding to purchase up to 200,000 barrels of Iranian crude oil per day as the country moves to ramp up its exports to pre-sanctions levels.
However leading shipping players say efforts by Iran to start exporting oil to Europe are being held up as tanker owners are still struggling to secure insurance for cargoes.
French national railway operator SNCF is to provide expertise for the building of high speed rail lines and stations.
French banks remain wary
Iran’s trade and industry minister has urged French banks to overcome their wariness about doing business with the country, seeking to drum up much-needed foreign investment.
French banks have been reluctant to handle deals with Iran, deterred by a $9 billion US fine on Paris-based BNP Paribas in 2014 for sanctions violations.
Even as other trade deals were signed, meetings with leading French banks such as BNP Paribas and Societe Generale were not officially on the agenda of the Iranian delegation in Paris.
Industry minister Mohammad Reza Nematzadeh, speaking at a Franco-Iranian business forum, said there were no longer obstacles to keep French banks from doing business with Iran.
“If they don’t get active, there will be no increase in business,” he warned.
Nematzadeh said international banks only needed to respect three conditions to avoid falling foul of US sanctions: not do work through a US branch, avoid doing business with persons and entities on the sanction list, and not clear transactions via the United States.
“These three conditions are very clear. Please take this seriously, from our side things have started,” he said. “If the banks don’t start, we are just wasting our time.”
But senior French bankers said the memory of BNP Paribas’ fine remained too fresh and the current sanctions framework, with a possibility to snap them back in place, was off-putting.
The French and Iranian central banks have formally re-established ties to allow Iranian lenders to handle business with France, French Economy Minister Emmanuel Macron said.