The headline may appear to address the general topic of the new sanctions on Iran, but I am actually more interested in writing about where the sanctions will end, which parties are affected by the sanctions, and in what way.
It is a fact that sanctions against Iran are becoming stricter every day. I am pretty sure that the effect on Iran is a big issue for Iran, but one should also note that Iran represents a big market for some external industries and this big market is now more difficult to approach due to the sanctions.
The effect created by the sanctions is now reaching the extent that some companies who have business with Iran are at risk of losing their market in the country. These companies exporting to Iran from the EU or from other parts of the world must adhere to more limitations than for other countries. Some of these companies are becoming hyper vigilant and sensitive about violating the sanctions. The word “scared” might not be the most fitting word for the emotional condition of the executives of these companies, but they are very concerned. In addition, money transfers are extremely difficult, both inbound and outbound from Iran.
Politicians certainly make statements that the sanctions are not directed at the people of Iran but against the nation of Iran (though I don't know exactly what this means), and it is certainly the people who suffer. Reuters lately reported that the widening sanctions are already doing significant damage to the Iranian economy, notably due to an oil embargo imposed by the European Union this year and new financial sanctions applied by the United States.
Riots have broken out in Tehran this month in protest of the collapse of Iran's currency, the rial, which has lost some two-thirds of its value against the dollar over the past 15 months, stoking inflation that is now running at around 25 percent.
The European Union recently extended its sanctions on Iran. The new and enhanced sanctions restrict trade in a long list of industries, and it is not only the specifics of the goods that are regulated, but there are also restrictive measures with respect to finance and payment matters.
The mineral industry, in particular, has to handle trade with Iran with more care now. I will not go into detail here in this article, but the new regulations cover unfinished or raw materials, such as graphite. The regulation expanding the sanctions prohibits the supply, sale, transfer or export to an Iranian person, entity or body, or for use in Iran, of several specific raw or semi-finished materials listed in an annex.
The sanctions also include consultants and other services. Technical or financial assistance or brokering services for the specified materials are also required to respect the sanctions regulations.
If I may call it good news, there is an exemption for contracts signed prior to Dec. 22, 2012, that may be executed until April 15, 2013.
There are also expanded sanctions related to energy, and those who are interested can follow this link for further details: http://eeas.europa.eu/cfsp/sanctions/index_en.htm. I wonder how Turkish companies will handle the regulations related to natural gas.
I will continue with the effects of the new sanctions in my next column.
NOTE: Berk Çektir is a Turkish lawyer and available to answer questions on the legal aspects of living and doing business in Turkey. Please send inquiries to [email protected] If a sender's letter is published, names may be disclosed unless otherwise expressly stated by the sender.
DISCLAIMER: The information provided here is intended to give basic legal information. You should get legal assistance from a licensed attorney at law while conducting legal transactions and not rely solely on the information in this column.