German firms sign contracts in Iran on trade mission

German firms sign contracts in Iran on trade mission

German firms sign contracts in Iran on trade mission German firms have signed a range of business deals with Iranian partners as part of two-day visit with Economy Minister Sigmar Gabriel aimed at rebuilding trade ties, the ministry said on Oct. 3.

Gabriel has flown to Iran with a planeful of executives who are keen to re-establish business relations with the Islamic Republic after it reached a landmark deal with world powers over its disputed nuclear program.

However, remaining U.S. sanctions and political concerns have so far held back a hoped-for business boom.
The ministry said several German Mittelstand firms, the small-to-medium-sized companies that form the backbone of the economy, had signed deals with Iranian partners, including SMS group, a builder of steelmaking plants and INTRA industrial solutions.

In addition, Mitsubishi Germany has signed a contract to modernize a gas-fired plant, while plant constructor Keller HCW wants to build a brickyard in Iran, it said. Both countries central banks have also agreed to a technical co-operation.

There was no detail on the size of the agreed deals.

Iran’s Deputy Economy Minister Mohammad Khazaei said earlier that 10 economic agreements would be signed on the sidelines of Gabriel’s visit. “I hope that this will smooth the way between both countries,” he said.

Germany, which has commercial and cultural ties with Iran that go back to the 19th century, was for decades a major trading partner of Tehran before the sanctions allowed China and several other nations to overtake it.
Gabriel is making his second visit to Tehran since the Islamic Republic reached a deal in July last year which lifted economic sanctions imposed on Iran over its nuclear program, in return for curbs on its nuclear activities.

Industrial giant Siemens AG and automaker Daimler will be among the first German firms to benefit from opportunities in Iran, but they are proceeding carefully and only after legal reviews.

The German banking sector has been reluctant to underwrite business deals for fear of falling foul of remaining U.S. sanctions imposed on Iran for what Washington says is Tehran’s money laundering, support for terrorism and human rights abuses.

Gabriel said earlier that Germany wants to help Iran push ahead with reforms, and promised to remind the United States of its commitment to reduce sanctions against Iran.