US call for sanctions against Iran to have limited impact on Ireland

Irish firms unfazed amid low level of exports and financial curbs on deals with Tehran

Mural on the wall of the former US embassy in the Iranian capital Tehran: Ireland has yet to exploit an economic relationship of scale. Photograph: Atta Kenare/AFP/Getty Images

Mural on the wall of the former US embassy in the Iranian capital Tehran: Ireland has yet to exploit an economic relationship of scale. Photograph: Atta Kenare/AFP/Getty Images

 

Irish companies are unlikely to get caught in the crossfire between the United States and the European Union over sanctions on Iran due to the relatively low level of trade between the two countries.

The Department of Business, Enterprise and Innovation said it had not been contacted by any companies seeking guidance on the reimposition of sanctions by the US government.

But it said it was intent on alerting Irish businesses to the updated EU blocking statute, which came into effect on Tuesday and which seeks to protect European businesses trading with Iran.

With a population of 80 million and a relatively wealthy middle class, Iran has long been seen as a potential market worthy of exploration by Irish exporters. However, pre-existing sanctions and a refusal by Irish and international banks to permit transactions with Iran has meant that the economic relationship between the two countries has yet to be exploited.

Both Bord Bia and Enterprise Ireland organised trade missions to Tehran following the lifting of sanctions two years ago. However, a number of companies that went on one of the trade missions, such as Ornua and Lakeland Dairies, told The Irish Times they were not currently trading with Iran.

Principal exports

Exports to Tehran rose from €72 million in 2016 to €143 million in 2017, according to the Central Statistics Office (CSO). However, this represents just 0.1 per cent of the State’s total exports last year.

The principal exports to Tehran have tended to be in the medical and pharmaceutical products space.

Ireland’s food exports to Iran jumped from €7 million to €11 million last year, of which over €10 million was dairy-related. While many Irish agribusinesses have expressed an interest in growing trade with Tehran, few have actually done so in practice.

This includes Irish beef producers which were banned from bringing beef into Iran in 1996 due to widespread fears of the BSE disease. Prior to the ban, as much as 25,000 tonnes of beef was exported to Tehran.

Despite the lifting of the ban five years ago, exports have not properly resumed. Less than €20,000 worth of beef was exported to the Middle East’s second-largest economy last year, according to CSO.

Visas and insurance

Minister for Enterprise Heather Humphreys earlier this year told the Dáil that, while the reluctance of banks to deal with Iranian-linked transactions impacts on exports, there were a number of other issues at play. These include difficulties organising travel and/or business insurance and visa waiver issues for individuals seeking to visit the US after having previously travelled to Iran.

Ms Humphreys said the primary sectors where Irish companies could potentially increase their presence in Iran included aviation, financial services and software, ICT, telecommunications and mobile software, education services, agritech/food production and lifesciences and pharma.

She said Enterprise Ireland had employed an in-country Iranian market expert to provide advice and assist clients who may encounter difficulties due to the reimposition of sanctions.