France opens business office in Tehran – Iran plans Airbus, Boeing purchases under finance deals.

France opened a business development office in Tehran yesterday seeking to renew once strong economic ties with Iran after the July 14 nuclear deal in the face of “fierce competition”. French Agriculture Minister Stephane Le Foll and Minister of State for Foreign Trade Matthias Fekl inaugurated the “Business France” office on a visit with some 150 business leaders that is to run until tomorrow.

Le Foll warned that French companies face “fierce competition” from other European and American firms seeking a slice of the Iranian market with its 79 million population. France’s longstanding business ties with Tehran should give it an edge, he said. “What we want is to promote and rely on what already exists, on what must be developed and then also to innovate,” the minister said. In the sanctions era, French companies scaled back their activities but without closing shop in the Islamic republic.

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British Foreign Secretary Philip Hammond visited Tehran last month following in the footsteps of his Italian, French and German counterparts as European businessmen line up to invest in the Islamic republic’s drive to revamp its battered economy. Fekl said the opening of the “Business France” office in Tehran was “a strong signal of our desire to work in the long-term” with Iran.

French trade with Iran dropped from some 4 billion euros ($4.5 billion) in 2004 to 500 million euros ($565 million) in 2013 as a result of international sanctions imposed on Tehran since 2006 due to its disputed nuclear program. But the landmark accord struck in July with six world powers-Britain, China, France, Russia and the United States plus Germany-provides for lifting the sanctions in exchange for Iran not developing nuclear weapons.

Aircraft deal:

Iran plans to buy Airbus and Boeing passenger planes through long-term payment agreements once a nuclear accord with world powers is implemented, the transport minister said. Iran desperately wants to upgrade its ageing fleet, which has been hamstrung by nuclear-related and other sanctions, making even spare parts precariously difficult to source.

To purchase new planes, “our negotiations have been mostly with Airbus and Boeing, and we have provided them with our plans and needs until 2020,” Abbas Akhoundi was quoted as saying in Monday’s Iran government daily. “For shorter range planes, we have talked with other companies also,” he said, in remarks made to reporters on Sunday.

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An embargo dating from 1995 prevents Western manufacturers from selling equipment and spare parts to Iranian companies. The restrictions, which have been blamed for crippling the industry, were partly lifted by an interim agreement on Iran’s nuclear program that came into force in January 2014. This allowed for the sale of spare parts, although direct sales of aircraft remained banned.

A final accord reached in Vienna on July 14, which is yet to be implemented, will lift the sanctions in exchange for putting curbs on Iran’s nuclear program. Last August, a civil aviation official said Iran planned to buy 80 to 90 Airbus and Boeing airliners annually until it has 300 to replace its ageing fleet.

Iran’s fleet is now around 140 aircraft, but many are in desperate need of replacement. Akhoundi said Iran had offered its “proposals” to the aviation companies. “A company will be founded. It leases or hire purchases the plane from the foreign companies, and provides the Iranian airlines with new planes, so that domestic companies are not involved with the purchase,” he explained. “Hire purchasing planes is common in all countries and renovating the fleet becomes much easier this way,” he added. In May, Akhoundi said that Iranian airlines had obtained 15 used aircraft since February as part of efforts to renovate its fleet.

Via: Kuwait Times/AFP

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