Three months on from the UK's decision to leave the European
Union and there is still much uncertainty about the impact of
Brexit. Following a Clyde & Co survey with over 50 Senior
Executives it was clear that the lifting of Iranian sanctions is
the most likely to impact global trade. We discuss the results
Withdrawal of Iranian sanctions the top concern for global
The withdrawal of Iranian sanctions will have a greater impact
on their businesses than Brexit negotiations and the upcoming US
Presidential election. The survey showed that 40% of senior
executives at global trading companies believe that the lifting of
Iranian sanctions will have a more profound impact on their
business over the upcoming financial year.
Iran: issues remain
While the withdrawal of Iranian sanctions could provide a huge
windfall for businesses, there is a raft of issues that are
currently stopping companies from trading with the country.
One of the key barriers is access to finance. Despite
reassurances from OFAC most banks are still very reluctant to
finance businesses involved in Iran. So far, the European tier one
banks have shown zero appetite for conducting Iran-related
business. This means businesses are unable to access credit to fund
their business with Iran.
Businesses that do manage to access finance must consider the
level of due diligence involved in trading with a country whose
economy still has close ties to of individuals and entities that
are listed by the EU/UK and US, including the Islamic Revolutionary
The impact of Brexit negotiations on global trading
Over 40% of businesses said that post-Brexit the outcome of
global trade agreements would have the most significant impact on
their business. Trading companies operating within either the UK or
EU are likely to feel a significant impact to their business once
the UK negotiations with the EU are completed.
For trading companies that operate outside of the EU and UK,
Brexit may not have a direct impact. However, as senior Government
officials have made clear, the UK is looking to establish new trade
agreements with non-EU countries. Once these ties are established,
they may have a significant impact for businesses operating
Entry into new markets a priority for businesses
In light of current market conditions, the most popular strategy
Senior Executives regard as a priority for their business is entry
into new growth markets (36%). This was followed by embracing new
strategic partnerships (26%) and restructuring (17%).
The full impact of Brexit on global trading companies remains to
be seen. It is understood that these businesses will be waiting to
get a better indication of the outcome of the negotiations before
deciding how best to play their hand and adjust their business
models. Additional shifts in trading relationships and trade
corridors will also arise from the commercial direction of
individual firms, multinationals and major supply chain anchors, as
they re-assess the evolving place of the UK on the map of global
*  Senior Executives of global trading companies were
surveyed. The companies operate throughout The Americas, Europe,
Asia, Africa and Australasia
On January 16th 2016, Implementation Day was announced. This marks the day on which the International Atomic Energy Agency verified that Iran implemented its agreed nuclear-related commitments contained in the JCPOA.
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