Despite sanctions, business ties between Germany and Iran remain strong.

German firms, though, continue to engage in brisk trade with Iran and are finding ways of exporting goods despite mounting restrictions.

 

German companies have adapted to the sanctions and even the European Union's decision in January to freeze the assets of Iran's central bank and this month's move to disconnect Iranian banks from the Swift financial transfer network won't shut down legal exports of machinery, chemical products, agricultural produce, vehicles and vehicle components to Iran.

 

Alternative ways are being found for settling trade debts, including suitcases filled with cash, barter deals, and especially money transfers via banks in third-party countries such as Turkey, Armenia, Belarus and Azerbaijan.

 

German exports to Iran fell 18 percent last year but still amounted to a hefty €3.1 billion. They are expected to fall at a similar rate this year, with the German engineering industry association, VDMA, complaining this month that the financial sanctions will have "massive effects" on German firms. 

 

Germany is the EU's biggest exporter of goods to Iran, well ahead of Italy and France. In 2010, China was the biggest source of Iranian imports, followed by the UAE and Germany, according to the CIA's World Factbook.

 

Yet German firms have gone on supplying industrial equipment that Iran not only cherishes due to its quality, but relies on to keep its industries functioning.

 

Recent trade and business exchanges, though legal and not in breach of the various sanctions already imposed on Iran, reflects Germany's long-running ambivalence towards the West's tough stance on Iran, despite its claim to be 100 percent behind efforts of Iran sanctions.

 

For years, Germany maintained a balance between backing sanctions vigorously enough to avoid negative international headlines, and preventing the restrictions from becoming so severe that they hurt German business.
 

(Source: thenational.ae)