BERLIN, Aug 12 — German exports to Iran fell by nearly half in the first six months of 2019, data showed today, suggesting companies are scaling back business ties with Tehran to avoid trouble with the United States after Washington re-imposed sanctions.
Sales to Iran plunged by 48 per cent to €678 million (RM3.2 billion) from January through June year-on-year, data from the Federal Statistics Office reviewed by Reuters showed. Imports from Iran declined by 43 per cent to nearly €110 million.
“The fact that trade between Iran and Germany has collapsed that massively is not a big surprise, unfortunately,” the BGA trade association said.
It pointed to the extra-territorial character of recent US sanctions which means that companies from third countries are also punished if they do business with Iran.
“German companies are forced to choose between their market activities in Iran and the United States, so it’s clear which market is preferred,” BGA said.
President Donald Trump last year pulled the United States out of a nuclear accord between Iran and major powers. Under the 2015 deal, international sanctions against Iran were relaxed in exchange for Tehran curbing its nuclear programme.
Despite the US decision to re-impose the sanctions, Germany, France and Britain are trying to rescue the agreement by setting up a barter-based trade conduit with Iran, but an Iranian mirror mechanism has yet to be established.
If the mechanism, also known as Instex, goes ahead, it would initially deal only in products such as pharmaceuticals and foods, which are not subject to US sanctions.
Iranian officials have repeatedly said Instex must cover oil sales or provide substantial credit facilities for it to be beneficial.
Last year, Germany exported mainly machinery, chemical products and cars and car parts to Iran. — Reuters
Source: The Malay Mail Online