German midsized firms build Iran market share

BERLIN, Dec 11, (RTRS): German exports to Iran soared in October, a month before the United States re-instated sanctions on the Islamic Republic to choke its oil and shipping industries, data seen by Reuters showed on Tuesday.

The surge signals willingness among Germany’s small to medium-sized firms, or Mittelstand, to continue doing business with Iran despite the risk of being blacklisted by the United States for defying its sanctions.

Official figures by the Federal Statistics Office reveal that German goods exported to Iran totalled almost 400 million euros ($455 million) in October, a year-on-year surge of 85 percent and the highest monthly volume since 2009.

US President Donald Trump reimposed sanctions on Iran on Nov 5 after he abandoned a 2015 nuclear deal between Tehran and world powers. He said the sanctions seek to cripple Iran’s oil-dependent economy and force it to abandon its nuclear ambitions and ballistic missile programme and halt support for militant proxies in Syria, Yemen, and Lebanon.

Around 1,000 German Mittelstand companies have business ties to Iran

and 130 have set up branches in the country. Multi-national companies, including German engineering giant Siemens, have pulled out of Iran, fearing US sanctions.

Mittelstand companies provided most of the exports to Iran, Michael Tockuss of the German-Iranian Chambers of Commerce and Industry said. Chemicals made up about half the German goods; machines and plant equipment accounted for a third.

Tockuss said Mittelstand companies exporting to Iran were taking a calculated risk, believing US sanctions are aimed at hindering big projects in key sectors like banking and shipping.