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February 19, 2013, Tuesday

Sanctions on Iran (2)

In my last column, I covered a number of new restrictions resulting from sanctions on Iran. Today, I would like to discuss exemptions from these sanctions.

There are several exemptions from the sanctions on energy and other areas, such as the one which enables nationals of EU member states to purchase natural gas within Iran for residential, civilian purposes or for diplomatic missions. I think life for foreign citizens living in Iran would be very difficult without this exemption. There are several exemptions related to other industries, some of which are general across industries while others are specifically granted for a particular industry.

Because there are several exemptions and the regulations are complex in some ways, an expert opinion should be obtained for the sake of compliance with the regulations.

I sought the opinion of Iran on the matter and would like to quote some of what Mr. Malekoddin Shafaghat, a representative of the Iranian Consulate in Istanbul, told me. Shafaghat stated that sanctions are not new to Iran but have been a burden for over 30 years. Iranian authorities are of the opinion that the people of Iran consider the sanctions a threat against them and therefore the sanctions work in a different way in Iran, bringing people together in shared deprivation.

Iran claims that the sanctions have even scared off some pharmaceutical companies and the people of Iran suffer from lack of medicines. Shafaghat underlined that the country's access to humanitarian aid has also been limited by the sanctions. This information is contained in a report by the Wilson Center. I believe this matter deserves consideration.

According to the information provided by the Iranian press representative, Iran is quite proud of its position in trade. It is stated in Iran that the sanctions do not have any negative affect on the country's foreign trade. I was surprised to learn that Iran, from time to time, has doubled its trade with its biggest trading partners since the implementation of the sanctions. Iran's major trading partners do not recognize the sanctions on Iran and continue to trade with the country.

My personal observations lead me to remark about this matter. One should note that these major trading partners or individuals who violate the sanctions are prosecuted by US authorities when the transactions are detected. I know of a couple of cases from Turkey that led to severe criminal accusations and prosecution in the US. Therefore, not respecting the sanctions could bring dire consequences.

The sanctions have turned into a kind of opportunity for Iran. Local companies have been strengthened since many multinationals have not been able to operate in Iran as they could in the past. Some industries that did not exist in the country in the past are now producing domestically. Limitations on imports imposed by the sanctions have been a positive for the budget of the country, too. The scientific developments and local production campaign prove that the sanctions have had no effect on the Iranian economy, says Shafaghat. After reading this informative note from the Iranian Embassy, I even started to think that sanctions are not that bad.

Although Iran is proud of the support it receives from its major business partners and the development of domestic industry, I do not think it is enjoying the overall situation.

Shafaghat concluded his statements with a protest of the sanctions, but his final remarks are worth reading and considering. He said: “Iran is ready to start talks and negotiate on the basis of mutual respect, of people of Iran, political, economic and cultural independence. Dialogue is always a key of wisdom. I wish that talks towards a positive progress and peace prevails.”

NOTE: Berk Çektir is a Turkish lawyer and available to answer questions on the legal aspects of living and doing business in Turkey. Please kindly 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 seek legal assistance from a licensed attorney at law while conducting legal transactions and not rely solely on the information in this column.

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