TEHRAN – Michael von Ungern-Sternberg, the German Ambassador to Tehran, says Iran provides great business opportunities for foreign companies.

“Iran offers great opportunities,” Ungern-Sternberg said in an exclusive interview with the Tehran Times.
Ambassador Ungern-Sternberg also said the nuclear agreement clinched between Iran and six great powers (the U.S., Germany, Britain, France, Russia, and China) in July was “a huge step forward”.
The interview with Germany’s top diplomat in Iran took place before U.S. President Barack Obama secured enough support in the Senate to ensure that the nuclear deal will go into effect.

Following is the text of the interview:

Q. What is your assessment of Iran’s nuclear deal and its impact on the Middle East?
A. Let me highlight two points in this context. Firstly, this agreement was a huge step forward. You saw how much political capital was invested and how intensely the foreign ministers discussed the nuclear issue. I don’t think any of the western ministers negotiated as much and spent as much time in one spot as they did in Lausanne and Vienna for the agreement to be achieved. This clearly shows how much importance was attached to the agreement and that its success was the result of a collective effort. Consequently, I will not single out anybody but I think the Iranian side contributed to it as much as the American side. Also the partners in Russia and China were important and of course we believe that the European Union and the three European countries made a big contribution. Federica Mogherini’s External Action Service played a crucial role - they probably bore the brunt of the workload, both at the higher and technical level.
Secondly, it is now imperative to fully implement all things agreed. We know that in this context there are difficult ongoing discussions in Iran and in the U.S. in particular. First we have to wait and see what happens in Congress and in the Majlis. The UN Security Council has already taken a big step forward by endorsing the JCPOA through a resolution. Now, of course it will be up to the IAEA to report back about the implementation of the agreement - then hopefully we will see sanctions relief in the beginning of next year.
As to the impact that the deal will have on the region: Of course, there is great hope that this will have a positive effect beyond the nuclear topic and that it will help to stabilize a region in turmoil. One look beyond the Iranian borders – whether it be Syria, Iraq or Yemen - is enough to understand the need for urgent action. As we hope, more dialogue will be seen in months to come and eventually a common understanding on how to proceed on the different issues might be reached. Foreign Minister Zarif is now touring the region. He has been to a number of (Persian) Gulf countries. This tells us about Iran’s willingness to engage in a dialogue with important players in the region and Germany of course welcomes this development. Needless to say, the nuclear agreement itself can’t solve existing tensions and conflicts. But I do think it has a potential to trigger developments which facilitate more diplomacy in the region.
Q. There is opposition to the deal from some countries. Do you think they can eventually kill the agreement?
A. I don’t want to speculate. That is something diplomats generally shouldn’t do too much. However, we are very hopeful that no one will prevent the deal from being implemented. Even in Iran a parliamentary procedure is underway and I don’t think it is good to point the finger at any individual country and to question their willingness to deliver. As you probably know, in the case of Germany there is no need to refer the agreement to parliament for approval. But every country has its own procedures. And during the final phase of the Vienna negotiations a decision was taken by the Iranian parliament which requests a consultation on the agreement. In essence, there is going to be a parliamentary process both in the United States and in Iran. And we are hopeful that the results will be positive.
Q. Don’t’ you think that most of the opposition comes from the U.S. congress rather than from the Iranian parliament?
A. I can’t tell you what the Iranian parliament is going to decide as I simply don’t know. As I understand it, an ad hoc committee has been set up to look into this issue and it would be inappropriate for me to guess whether the Majlis is going to give the go-ahead or not. This is an open process. I would recommend waiting until both countries have finished their procedures. But you are right - in the United States obviously there is a very intense debate on this.
Q. What would be the response of the other P5+1 countries, if the U.S. congress sabotages the deal?
A. This is a hypothetical question and as I said it wouldn’t make any political sense to discuss these scenarios. We are hopeful and have reasons to believe that this deal will pass. President Obama has made it clear that he will make use of his veto power if the U.S. congress votes against it. So let’s wait and see how this plays out. I don’t think it is politically wise to speculate.
Q. Prior to heavy sanctions, Germany was one of the major trading partners of Iran. After the lifting of sanctions, in what areas will Germany be cooperating with Iran?
A. We are looking for cooperation in all areas - whether it be the economy, culture, science and education or in the field of politics. Economically speaking, what can be achieved is much more exchange, that is higher investments and more trade. As you rightly mentioned, we enjoyed a high level of exchange before the beginning of the international sanctions. Trade figures were higher, investments were more significant and I know from German companies that right now there is huge interest to reengage. The recent visit of a high-ranking business delegation, headed by our Vice-Chancellor, Mr. Sigmar Gabriel, underlines this fact. German companies are well aware of Iran’s great potential: You have a very well-educated population, a good workforce and the required infrastructure. Moreover, the resources are here and our common history has laid the foundations for a good mutual understanding between German entrepreneurs and Iranians. You know, Iranians always speak very politely but I tend to believe what they say - And they say that they like German products. Indeed, Germany is a fairly successful country when it comes to international trade. For a number of years, we have been either number 2 or 3 as far as our volume of trade is concerned and there must be a good reason for that. With open markets and under conditions of fair competition, we believe that German businesses can succeed. And we don’t see any reason why that shouldn’t happen here. Iran offers great opportunities. This country obviously does not want to depend on imports and, understandably, Iran wants to have its own well-trained workforce profiting from new investments. Accordingly, enhanced mutual cooperation is something both the German and the Iranian governments are actively seeking.
Q. How would Iran-Germany relations impact Germany’s status in the EU?
A. I don’t think it changes anything inside the European Union. When it comes to Iran, we have a common position inside the European Union based on a shared understanding of the situation. Generally speaking, there is great openness towards your country in the EU. Mrs. Mogherini, the Vice President of the European Commission made that point when she came to Iran. Therefore, I think it is good that the EU as a whole is getting more and more involved in Tehran. Let me point out one example: All over the world, we have representations of the “European External Action Service” - you could call them “Embassies” of the European Union. So far, we don’t have such an institution here in Tehran, but in the long run their establishment would certainly be beneficial.
This said, we are obviously interested in what other European countries are doing here in Iran. But I think the aspect of competition is sometimes over-emphasized in media coverage. Other European countries don’t come here just because the Germans are here or vice versa. Everybody knows that Iran is an important country and wields a great deal of influence in the region. Consequently, Iran can have a very stabilizing effect. This is one common interest we all share. Moreover, all European countries want their businesses to enjoy a good and fair legal environment when they enter the Iranian market. And this is rather a unifying factor among us.

Q. French and German delegations have been coming to Iran recently to test the waters in Iran’s market. How seriously do they consider entering Iran’s market?
A. We consider Iran to be a country with huge potential. Mr. Sigmar Gabriel didn’t just opt for a one day stop - he invested a lot of time into his visit to Iran and travelled to Isfahan after his meetings in the capital. The intention behind his decision was clear: I am interested in your country, its culture, its heritage and people. This positive attitude towards Iran can be traced back a long way in German history. Fortunately, we have big institutions in Tehran which bear witness to our long-standing relationship: Think of the German language institute, the German Archeological Institute or the German Academic Exchange Service (DAAD) which facilitates student exchange between our two countries. It has an office here, and its lecturers are employed in different universities in Tehran and in Isfahan. Likewise, we are glad to have a lively and very active German-Iranian chamber of commerce. So I think we have a very good infrastructure on which to expand our relations. But let me come back to your question on private businesses - they also draw on a long tradition of successful German-Iranian cooperation and I guess this will have an influence on the decision-making process in many companies.

Q: Is Germany willing to introduce investment opportunities in Iran to other European countries?

A: I do not think that Iran would want Germany to speak on behalf of it. Iran will doubtlessly do its best to promote its business opportunities. The recent visit of Mr. Nematzadeh, the Iranian minister of industry to Vienna clearly served this purpose. But right now there is a huge flow of delegations into Iran. That’s why people sometimes tell me that Germany should hurry up because others will grab the opportunities and nothing will be left. My answer has always been that we should not worry about that. If many other companies decide to invest in Iran, this only underscores the attractiveness of the Iranian market. This is the best argument that Iran can provide to its business partners.
In essence, only the Iranian side will be able to promote the inflow of investment and I’m sure many new foreign businesses will provide the best incentive for others to follow suit. At the end, it is up to each individual company to take its business decisions. We as the government can’t instruct a company on how to proceed.

Q: Can Iranian investors who are currently living in Germany participate in Germany’s trade with Iran?

A: Yes, of course. An Iranian citizen legally doing business in Germany enjoys the same rights as his German counterparts. Of course, I don’t know if there is any legislation in Iran that would privilege an Iranian citizen in Germany when doing business with Iran. But from a German point of view, anybody who operates a business in Germany and does what is allowed under German law will be free to go about his business irrespective of his nationality.

Q: Which German corporations have the priority to enter to Iran’s market?

A: We have no particular sector which we will try to privilege and again - this is a private business decision. However, I do think there are certain areas where we have particular strengths. Let me just mention machinery, the automobile sector, pharmaceuticals and the chemical industry. We are not as strong as other countries when it comes to the oil sector, there are no German companies among the global oil giants. However, there are medium-sized companies that can engage very significantly in a variety of areas.
One such example is the medium-sized company “Herrenknecht” involved in the construction of subway tunnels on a global scale. They already have an office in Tehran and they are currently engaged in projects in Isfahan and - I think - in Tabriz. Their presence here can be described as a success story. Therefore, when assessing new investments into Iran, we should not limit our view to the very well-known names.
Q: Iran is facing many environmental challenges such as air pollution and water shortage. Is Germany willing to cooperate with Iran and help the country to overcome such challenges?

A: I think water is a huge issue and many of the recipes are quite well-known: All our figures tell us that over 80 percent of water are used for agricultural purposes, so one needs to think about how to reform this consumption. Of course, Germany is always willing to enter into a discussion on the issue and an expert-level dialogue with this aim has been conducted in the past. The same thing applies to air pollution: We have developed technologies which have led to less pollution being produced in Europe. Widespread use of low-consumption engines has helped as much as the expansion of our public transport system, this is important for a city like Tehran. When Germans visit the Tehran subway, they tend to be impressed by its high standards and its modern looks. However, there are 14 million people living in this city, so the network has to be considerably improved.
As you probably know, Germany is traditionally renowned for its green energy production. In addition, in our country the decision was taken to gradually take all nuclear power plants off the grid. Hence the need arises for the production of renewable energies. Here in Iran you have a lot of sun, wind and I think there is huge potential to advance in these areas. Obviously, both government and parliament would have to set a good legal framework which is quite complicated. In Germany a lot of readjustment was required in this regard. Needless to say, the private sector also needs to be convinced of the prospects of this business and must be ready to invest in green technologies.
But then, not only production, also energy consumption plays an important role. You have a very hot climate in many parts of the country. Traditional houses were often built in a way that made an AC superfluous. Today, however, people just can’t survive without an air conditioner - so how to build and insulate houses is very important.
Last but not least, when we talk about regional issues such as Lake Urmia, people know the issue and do not need any foreign advice. Unfortunately, we don’t have a magic formula in Germany on how to save the Lake, therefore there is no easy solution to which Germany can contribute. However, many studies have been published about the subject and on the need to re-organize the agriculture in the region. Germany should not interfere in the decision-making which is an internal process.