Iran's Rouhani Says Workers 'On Front Line' Against US

President Hassan Rouhani called on Iranian workers Tuesday to boost non-oil exports and import substitution, telling them they were "on the front line" against America and its tightening sanctions.

Last year, President Donald Trump reimposed crippling US sanctions after abandoning a landmark nuclear agreement between major powers and Iran.

Last week, his administration announced that from Thursday it would end oil purchase waivers granted to Iran's main customers including China, India and Turkey.

The move has piled new pressure on Iran's reeling economy that the International Monetary Fund was already projecting would shrink by 6.0 percent this year. 

Addressing workers in a south Tehran sports complex on the eve of May Day, Rouhani said that boosting Iran's manufacturing output was vital to shore up the value of the rial. 

"Whenever you go for self-sufficiency, you have increased the national currency's value and the more you can increase production for exports, you have increased our foreign currency revenue," Rouhani said in the speech broadcast live on state television.

"America's purpose in cutting oil exports is to reduce our foreign currency revenue and the way to counter it is through the production and export of non-oil goods," he added.

According to Iran's economy minister Farhad Dezhpasand, non-oil exports reached USD 40 billion for 2018-19.

That tops Iran's oil revenues projection for 2019-2020 of USD 30 billion.

But despite regulations in place requiring exporters to repatriate profits, only a quarter of non-oil earnings were returned to Iran. 

Rouhani vowed that despite the unilateral measures adopted by the United States, Iran would continue to supply oil to its major customers, all three of whom have expressed anger at Washington's attempt to impose its will.

Photo: IRNA

Iran's Industry and Roads Ministers Resign

Iran's President Hassan Rouhani has accepted the resignation of the embattled ministers of industry and roads, a statement on the presidential website said Saturday.

The president thanked industry minister Mohammad Shariatmadari and roads minister Abbas Akhoundi's "selfless service" and "sincere efforts" during their tenures and appointed two acting ministers.

Reza Rahmani, current deputy industries minister, will take over for Shariatmadari and the current governor of Mazandaran, Mohammad Eslami, will become acting roads minister effective immediately, the website said.

The two ministers reportedly handed in their resignations over a month ago as lawmakers were preparing impeachment proceedings against them.

Rumours of Shariatmadari's resignation first surfaced mid-September but were quickly denied by the ministry.

Akhoundi published his resignation letter dated September 1 on Saturday, pointing to a "difference of opinion" as the main cause.

Rouhani's labour and economy ministers were sacked by the parliament in August over their handling of an economic crisis, partly triggered by the withdrawal of the United States from the 2015 nuclear deal and reimpoisition of sanctions.

Rouhani himself was summoned to the parliament to answer questions from lawmakers on August 28, a first in his five years in power, and only the second time for a sitting president.

Lawmakers were also ready to impeach education minister Mohammad Bathaei but called it off on September 2 due to the upcoming school year.

Photo Credit: IRNA

European Losers in New Iranian Sanctions Game

US President Donald Trump's decision to pull the United States out of the 2015 nuclear accord with Iran and reimpose a raft of sanctions will hit European businesses working in Iran. Here is an overview of how firms stand to be affected when the sanctions kick in Monday:

Auto

French automakers Renault and PSA have taken different approaches publicly. PSA, behind the Peugeot, Citroen and Opel brands, said in June it was preparing to suspend activities in the Islamic republic, its chief foreign market by volume, noting those units account for "less than one percent of sales."

The group, which is Europe's second biggest carmaker, last year sold more than 445,000 vehicles in Iran, making the country one of its biggest markets outside France.

Renault says it intends to keep up activities in Iran albeit scaling them back. On July 16, the automaker announced a 10.3 percent drop in sales in Iran to 61,354 units.

Germany's Daimler was teaming up with two Iranian firms to assemble Mercedes-Benz trucks.

Volkswagen also said last year it would seek to resume sales in Iran for the first time in 17 years, yet the scale of its US activities could force the jettisoning of those plans. 

German firms' business with Iran was a modest USD 2.6 billion of 2016 exports rising to 3.0 billion last year. Italy is Iran's main European trading partner -- but Germany is still the bloc's biggest exporter to Tehran.

Aviation

Aviation saw beefy contracts drawn up following the nuclear accord as Iran targets modernization of an aging fleet.

Airbus booked deals for 100 jets although to date only three have been delivered after having US licenses bestowed upon them -- a necessity given some parts are US-made.

The potential loss of business in Iran would not weigh overly heavily on Airbus as overall orders on its books at the end of June stood at 7,168 planes. Franco-Italian planemaker ATR was fretting on the fate of 20 planes earmarked for Iranian delivery -- though Iran Air said Saturday five ATR-72600 aircraft would arrive Sunday, creeping under the deadline to add to eight already delivered.

Oil

French energy giant Total has moved away from a contract to develop an offshore gas field at South Pars in what would have been the first project of its kind since the 2015 nuclear deal.

Because Total's investment in the field had barely just begun, the company is avoiding incurring significant losses on a $5 billion project which Iran says Chinese group CNPC will now take up. 

After a 30 percent jump in 2016 in exports of Italian-made goods to Iran, Italian exports grew 12.5 percent last year to 1.7 billion euros, according to official data.

But energy giant Eni has held back on returning to Iran, preferring to wait on the impact of the latest sanctions.

Britain's BP, which started life as the Anglo-Persian Oil Company, has no presence in Iran. Although Anglo-Dutch giant Royal Dutch Shell signed a deal in 2016 to explore possible investments it does not currently have any operations on the ground. 

Railways and Shipbuilding

Italy stands to lose out in these sectors with national railway operator Ferrovie dello Stato Italiano having signed a deal to build a high-speed line linking Qom to Arak in northern Iran.

Shipmaker Fincantieri, engineering firm Maire Tecnimont and gas boiler maker Immergas has also signed a string of deals with Iran which now are also threatened.

Tourism

British Airways and German carrier Lufthansa face having to stop only recently resumed direct flights to Tehran or face losing Transatlantic business.

The dilemma applies to French hotel chain AccorHotels, which opened an establishment in Iran in 2015, as well as to Emirati group Rotana Hotels, which has designs on its own Iranian operation.

Spain's Melia Hotels International chain, which signed a 2016 deal to run a five star hotel in Iran, the Gran Melia Ghoo, says the establishment is under construction and that discussion of its future is "premature."

Industry

Siemens returned to Iran in 2016 seeking to sell gas turbines and generators for electricity stations and has won a contract to sell compressors for a natural gas processor.

"The mega contracts hoped for when sanctions were lifted were never realized," KPMG advisor Kaveh Taghizadeh was recently quoted as saying in Stern magazine.

"Siemens will continue to ensure it remains in strict compliance with relevant international export control restrictions and all other applicable laws and regulations, including US secondary sanctions," Siemens spokesman Yashar Azad told AFP.

He added Siemens "will take appropriate actions to align its business with the changing multilateral framework regarding Iran." French industrial gas group Air Liquide says it will "cease all commercial activity" in the country although a spokesperson says the firm has "no investments" there.

Pharmaceuticals

Pharmaceutical giant Sanofi, in Iran for over a decade, remains operating "in full compliance with international regulations", a spokesman said, while adding "it is still too early to comment on the potential impact" of sanctions.

Banks

Germany's big banks, Deutsche Bank and Commerzbank, stayed clear of Iran after the US fined them hugely in 2015 for violating previous sanctions. Regional banks Helaba and DZ Bank pulled out of Iran after the US announced it was reimposing sanctions.

Photo Credit: Scania

French Carmaker PSA Says to Exit Iran Over US Sanction Risk

French automaker PSA said Monday that it would pull out of two joint ventures to sell its cars in Iran to avoid the risk of US sanctions after Washington withdrew from a key nuclear deal with Tehran.

"The group has begun to suspend its joint venture activities, in order to comply with US law by August 6, 2018," the maker of Peugeot and Citroen cars said in a statement.

European officials have vowed to try to shield their companies working in Iran from the reach of punishing US sanctions that are set to come into effect by November.

But with US President Donald Trump showing little inclination to spare EU companies, they must decide whether to continue to work in Iran if doing so puts their US operations at risk of huge fines.

PSA, Europe's second-biggest carmaker, signed deals with two Iranian automakers, Iran Khodro and Saipa, in 2016 after sanctions were lifted following the landmark 2015 accord aimed at prevent Tehran from developing nuclear weapons.

It was among several companies which rushed into Iran, hoping to meet pent-up demand in a country that had been squeezed by sanctions for years.

Last year PSA sold nearly 445,000 vehicles in Iran, making the country one of its biggest markets outside France.

Although it has been absent from the US market since 1991, the company said in January that it was hoping to launch a car-sharing service in one or two American cities.

But PSA, which also owns the Opel and Vauxhall brands, also noted that Iran sales still make up less than one percent of its total sales, and so exiting the country would not alter its financial guidance.

"With the support of the French government, Groupe PSA is engaging with the US authorities to consider a waiver," it said.

Yet the CEO of French oil giant Total, who was hoping to launch a major natural gas project in Iran, said last week that the chances of winning exemptions to the US sanctions were "very slim."

Photo Credit: IRNA