Germany formally suspends guarantees for business with Iran

Germany formally suspends guarantees for business with Iran

AP News- Dec 23rd 2022

BERLIN — The German government said Friday it is formally suspending export credit and investment guarantees for business in Iran in the wake of authorities’ crackdown on protests.

The Economy Ministry said it also has suspended other “economic formats,” including a dialogue on energy issues, in view of “the very serious situation in Iran.”

Export credit guarantees protect German companies from losses when exports aren’t paid for. Investment guarantees are granted to protect direct investments by German companies from political risk in the countries where they are made.

The ministry said that use of those instruments for projects in Iran was suspended for decades until there was a “short phase of opening” from 2016 as a result of Iran’s agreement with world powers, including Germany, on its nuclear program. It said that guarantees were granted or extended for a few projects in that period, but there have been no new ones since 2019.

The German government has now decided to “suspend completely” the guarantees, it added, and exemptions can only be granted if there are solid humanitarian reasons. German-Iranian trade totaled 1.76 billion euros (nearly $1.9 billion) in 2021 and 1.49 billion euros in the first nine months of this year, the ministry said.

Nationwide protests erupted in September after the death of 22-year-old Mahsa Amini, detained by the morality police for allegedly violating Iran’s strict dress code for women. They have since transformed into calls for the overthrow of Iran’s ruling clerics. Authorities have sought to stamp out the demonstrations and ramp up pressure on critics.

Since the protests started, the United States and European Union imposed additional sanctions on Iran for its brutal treatment of demonstrators and its decision to send hundreds of drones to Russia for its war in Ukraine. Germany pushed for a meeting of the U.N. Human Rights Council last month that voted to condemn the crackdown and create an independent fact-finding mission.