Contracts are now at risk for British firms
BILLIONS of pounds worth of deals struck by UK firms are at risk after Donald Trump pulled out of the nuclear pact with Iran.
Aeroplane production involving RollsRoyce could be hit, while Shell, mobile phone giant Vodafone and the owner of Vauxhall could also find themselves harmed by the sanctions.
UK and European companies poured into Iran when the pact was struck in 2015 to take advantage of the new market – but were last night left scrambling.
Although the UK remains part of the nuclear deal and the Government backs trade with Iran, most multinational companies do some business or banking in the US.
This means the sanctions could force them to stop doing business with the Islamic Republic or fall foul of the US government, which doesn’t want its companies to have any ties to Iran.
Businesses are being given 90 to 180 days to wind down activities. Theresa May warned British firms to seek legal advice.
Among the worst hit could be the European plane-maker Airbus, which employs about 10,000 in the UK making wings in Bristol and South Wales.
In December 2016, Airbus signed a deal to sell 100 of its jets for around £14billion to national carrier Iran Air, with the first planes delivered towards the end of last year. Although a European firm, Airbus needs a licence from the US to sell to Iran because it makes at least 10 per cent of its aircraft components in the US. And many of these jets are powered by Rolls-Royce Trent engines. On Tuesday night, US Treasury Secretary Steven Mnuchin said that Airbus and Boeing licences to sell passenger jets to Iran will be revoked.
Airbus said it was analysing Mr Trump’s announcement, adding: ‘ We will be evaluating next steps consistent with our internal policies and in full compliance with sanctions and export control regulations.’
The sanctions could also hit the ailing North Sea, due to Iran’s role in a key gas field about 240 miles north of Aberdeen.
A subsidiary of the National Iranian Oil Company owns 50 per cent of the Rhum field, which together with next-door fields Bruce and Keith can produce up to 5 per cent of Britain’s oil and gas. Much of the pipes and equipment servicing Rhum are maintained by US companies, meaning the field can be caught up in US sanctions. It is understood UK direct trade with Iran totalled at least £360million last year.
Shell, the UK’s largest listed company worth around £218billion, signed a deal with the National Iranian Oil Company in 2016 to explore areas of potential co-operation.
It has also been licensing its petrochemical technology to local Iranian partners. Last night Shell said: ‘We are assessing the impact of yesterday’s executive order.’
In other sectors, French carmaker PSA Peugeot Citroen, which owns Vauxhall’s factories in Luton and Ellesmere Port, agreed in 2016 to open a plant producing 200,000 vehicles annually in Iran.
And Vodafone, the world’s second largest mobile phone company, signed a deal with Iran’s HiWEB to boost broadband and mobile networks in October 2016.