The U.S. decision to gradually lift the sanctions on Iran should in theory induce many countries to explore business prospects in this country, which has massive wealth and a population of over 77 million.
Apart from its large oil and gas reserves, Iran also has some $150 billion in frozen assets abroad of which nearly $32 billion has been released and should give a positive shock to the country that has been reeling under Western sanctions for more than two decades.
But Lebanon appears hesitant to seize this opportunity and move to the promising Iranian market until the picture becomes very clear.
Lebanese banks, with deposits of more than $150 billion, seemed very cautious if not reluctant to take a hasty and risky decision to do any business with Iran.
“It is too early to consider examining possibility to do business with Iran because the Americans need to clarify the types of operations one can do with this country. I don’t think any Western bank is eager to make any move toward Iran until the sanctions are fully lifted,” Joe Sarrouh, the adviser to the chairman of Fransabank, told The Daily Star.
He added that some European banks have been fined billions of dollars by the Americans for doing business with Iran before the sanctions were lifted.
Sarrouh stressed that banks in Lebanon and the West want to know whether lifting the sanctions will also cover the Iranian Revolutionary Guard, which controls large parts of the oil and gas sector as well as some important businesses.
“There are a lot of things that need to be clarified. We want to know if the U.S. Congress or judicial authorities plan new sanctions on Iran concerning other files,” he said.
Central Bank Governor Riad Salameh told The Daily Star last year that Lebanese banks are not in a position to compete with other large banks in Iran.
Another banker said that lenders fear an American punitive measure if they moved too fast to Iran.
“Why should we take any risks? We don’t want do anything which we regret about in the future. For the time being, we will be the last banks to do business in Iran,” the banker explained.
But Lebanese industrialists and business leaders saw a great opportunity to increase the volume of trade with Iran even if the sanctions are not fully lifted.
Fadi Gemayel, the president of the industrialists association, said Iran has advanced industries that are not even available in Lebanon.
“They [Iranians] have heavy industries such as steel, plastics, cars and furniture. But we can provide the Iranians with Lebanese made cosmetics and designer clothes,” he added.
Gemayel pointed out that his relatives have a plastic factory in Iran.
Economist Marwan Iskander also insisted that Lebanon should grab this opportunity and open up to the Iranian market.
“The Iranians have billions of dollars in frozen assets and once these assets are released, it will create numerous opportunities in this country,” he added.
Fouad Zmokhol, the head of the Lebanese businessmen association, welcomed the implementation of the lifting of the U.S. sanctions on Iran, adding that his association was awaiting such a move.
Zmokhol, who recently visited Iran with a business delegation, favored setting up joint Lebanese-Iranian companies to develop mutual trade between the two countries.
He added that the decision to lift the sanctions on SWIFT operations (Society for Worldwide Inter-bank Financial Telecommunication) on Iran will allow the Iranian banks to carry out transactions with the outside world, including Lebanon.