The recent tightening of the sanctions against Iran has further unsettled the German economy. However, the sanctions are so specific that they will only have a direct impact on some German enterprises. Indirectly, however, all economic sectors will be affected by an increasing uncertainty in the trading community.
The sanctions are primarily aimed at the export of oil and natural gas into the EU. Thus, directly affected enterprises are only those which are dependent upon imports from Iran. Transitional regulations have been reached for existing contracts, albeit with a very short deadline of until 1 July 2012. Further uncertainty exists with respect to these transitional regulations, e.g. in the case of long-term framework agreements.
Further sanction regulations are directed against the petrochemical industry, applying both to the export of key petrochemical technology and the import of petrochemical products. Transitional regulations have also been reached herefor, albeit without a deadline. The oil and gas branch was already affected by the sanctions imposed in 2010. Enterprises wishing to trade with Iran outside the field of listed commodities can continue to do so.
However, the new sanctions are of indirect relevance to many other enterprises for another reason. Both the EU and the USA have made their resolution to further tighten the sanctions against Iran clear. And: politics and the European legislator are coming to decisions with increasing speed and are also swiftly implementing these decisions.
This means: Iran is becoming an increasingly uncertain business partner as the rules of the game can change at any moment and protection of confidence in already existing contracts is only granted conditionally and frequently without legal clarity. Whoever concludes a contract with Iran today must – irrespective of the branch – reckon with problems in the fulfilment of the contract, both with respect to the fulfilment of his own obligations as well as regarding receipt of the counter-performance.
The challenge in trading with Iran has thus long since passed the stage of observing the complex sanctions, the violation of which can incur a criminal penalty. An increasing focus is the structuring of the contracts in all economic sectors. Here, enterprises should use exit clauses to try and achieve the legal certainty that the EU regulations fail to give.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.