(MENAFN- Khaleej Times) Anecdotal evidence indicates that ? either innocently or otherwise ? dubai-based businesses are making approaches to the neighbouring country.
legal experts are warning businesses making overtures to iran that despite a warming of international relations with the country strict sanctions are still in place.
anecdotal evidence indicates that — either innocently or otherwise — dubai-based businesses are making approaches to the neighbouring country.
dubai-based american lawyer sheila shadmand who is the partner-in-charge of the dubai office of the world’s third-largest law firm jones day said there seemed to be “a lot of confusion in the marketplace” about what businesses could and couldn’t do in relation to iran.
“if you couldn’t do it a year ago nothing has changed to allow you to do it today.”
some people may be looking to travel to iran for introductory business meetings.
“we hear... that there appears to be a belief that steps can be taken to engage or start to engage in business.”
recently a small amount of sanctions were lifted in response to iranian president hassan rouhani’s renewed dialogue with the west over its controversial nuclear programme.
sanction relief had come into effect on fairly specific areas of trade such as gold and metals the purchase of petrochemicals from iran and aviation safety industry sales into the country.
“this is the start of a long process. it’s not going to happen overnight so to the extent that companies believe or feel that if they don’t start taking this step now they’re going to miss out we’re still talking years down the road.”
shadmand urged people to “think with caution” especially us citizens. eu and us sanctions were very similar but there were minor differences she said. some eu sanctions had been “eased”.
“if you have business interests in both you have to make sure you have complied with the stricter of the two and that’s generally the us.”
penalties ranged from fines to imprisonment.
“the penalties are up in the hundreds of millions and the reputational damage that comes from that is even more severe.”
sanctions implemented by the us congress needed to be removed the same way which would be a major delay she said.
she urged a “slow meaningful approach” to engaging with iran rather than jumping the gun.
international law firm chadbourne & parke compliance attorney ramsey jurdi an expert in iranian sanctions underscored the limited nature of the sanctions relief introduced at the start of the year. “many of the activities where there’s been a loosening of sanctions are not really relevant for the uae.”
jurdi also the president of the american business council said he had also heard about companies who were making approaches into the iranian market.
“i have seen companies that are eager and willing to... push the limits of the relief but my sense of [most of] those companies… is they’re willing to push the borders but they’re not willing to cross the line.” however he said those who were breaking the sanctions were probably doing so intentionally — and in many cases would have been doing so before the sanctions relief began.
“i think the companies that are approaching the iraninan market now are willing to take risks. these are not genuine mistakes.”
despite the lucrative nature of the heavily-populated underdeveloped iranian market businesses would be wise to proceed with caution.
“for businessmen to go charging into iran at the moment and start talking about doing deals with iran… is premature. there are three possibilities when we look at what will happen at the end of this six-month period that we’re currently in.”
the current interim sanction relief may be rescinded if negotiations sour they may continue to progress without a further deal and the current level of sanction relief would be extended or in the “best-case scenario” there may be a new interim or final deal. but even under a final deal a “phased approach” of sanction removal would take at least a year.
“it’s hard to put these things in place both from a technical aspect… and from a political aspect… so you can’t lift it all one day and then if the target country doesn’t comply put it all back in again.”
jurdi urged potential suitors to iran to first seek legal advice as some forms of business dealings were permissible — but it was “a very fact-specific inquiry”.
it was perhaps even more important now not to slip up as the us was being extra-vigilant about penalising those who broke or failed to observe sanctions.
“the us is keen to appease its allies’ concerns about the loosening of sanctions in iran both internally in the us and abroad. what the clear intent of the us to do... is to strictly enforce [sanctions] in the area there has been no relief so by jumping the gun too soon you’re potentially at greater risk than you were before because the us is trying to make a point here.”
in february after the sanctions relief was announced the us published a list of foreign sanctions evaders with whom the us would no longer do business including half a dozen companies in the uae.
— amanda?khaleejtimes.com
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