German - Iranian trade relations
STOP THE BOMB, 27 September 2009 (updated: January 2010)
For several decades, Germany has been one of Iran's most important trading partners. Even before the revolution in 1979, German companies had attained a leading position in Iran and succeeded in holding on to it despite intermittent political ups and downs. According to the German Statistical Federal Office, direct German exports amounted to $ 5,73 billion in 2008 (=3,92 billion Euros, an increase of 8,9% compared to the previous year). This amount does not include exports to Iran, which were conducted via other countries. [1] The German-Iranian Chamber of Commerce recently published an overview of the development of the German-Iranian trade during the last decades in a bulletin on Iran. In July 2009, Germany Trade & Invest, which is the foreign trade agency of the Federal Republic of Germany, reported that the export figures to Iran had remained unchanged compared to the same time last year. According to the same source, Germany is ranked number 2 in the world of exporters to Iran, even before China (and after the United Arab Emirates).
Here you can find statistics about European exports and imports to Iran for 2008 and 2009 (source: Eurostat)
What matters is not only the quantity but the particular kind of merchandise which Germany exports. The most important export products to Iran are important machinery of a large variety, iron and steal products, chemicals, electronic technology and motor vehicles. [2] German conglomerates like Siemens and other such conglomerates, but also medium sized companies like Steiner are active in the Iranian energy sector and are involved in the construction of power plants and gas liquefaction. New sanctions will probably target Iran's energy sector most particularly. German companies participate in Iran's trade fairs on a regular basis - most recently at the oil trade fair in 2008 and in 2009. (You can find a list of the German exhibitors here.)
According to Michael Tockuss, executive director of the German-Iranian Chamber of Commerce in Teheran, two thirds of all medium-sized factories in Iran are outfitted with German machinery, and are therefore dependent on a reliable supply of German spare parts. The extent and special nature of the German-Iranian business relations indicate that Germany has in fact considerable leverage to exert pressure on the political leadership of the Iranian regime due to its economic dependence on German trade.
The German Chamber of Foreign Trade (AHK) in Tehran (financed by the German government!) and the chambers of commerce in Germany are still fostering more trade with Iran - in spite of the ongoing and massive human rights abuses in Iran; in spite of Iran’s nuclear program; in spite of its threats against the very existence of Israel and in spite of international efforts for tougher sanctions.
Public seminars are periodically conducted in Germany with the purpose of assisting German entrepreneurs to connect with Iranian trading partners and which train them to be successful in competing on the Iranian market. The Iranian trading partners are mainly state-controlled conglomerates or companies. Approximately 70% of Iranian companies are directly or indirectly run by the Iranian regime. For example: the Revolutionary Guard which are subcontractors and which profit handsomely from these businesses and contribute substantially to the widespread corruption. In fact, most business transactions in or with Iran provide direct support to Iran's political leadership.
German companies in Iran: The AHK Iran (German Chamber of Foreign Trade in Tehran) has about 2000 members. Besides the huge conglomerates like Siemens, BASF or Daimler, ThyssenKrupp, Wirth, Linde, Lurgi, many medium-sized German companies are also present in Iran. It is estimated that thousands of German companies have sales personnel working in Iran.
Secrecy: Due to fear of a “tainted reputation”, many companies try to hide their Iranian business activities. Even members of the Iranian government, who used to publish business transactions with Western companies in order to demonstrate the international acceptance of its regime, now tend to act quite discretely. German companies are warned by Iranian officials not to inform the German public about their business transactions in Iran. In 2008 this was the explicit message of the Iranian vice foreign minister Mehdi Safari when he traveled through Germany with the intention of attracting more German business.
Front Companies: Due to the fact that the Iranian Defense Ministry and some companies related to the Revolutionary Guards are targeted by sanctions, part of the business with Iran is now operated through front companies in order to bypass sanctions. So far, little is known about these companies and there are no established regulations to control and contain these transactions. In 2007 the "National Council of Resistance of Iran" identified three German companies which had direct connections to the Iranian Ministry of Defense and to the Revolutionary Guards: Ascotech Co., Persia System Co. and Farzanegan Co. [3] "Bafa" (The Federal Office for Economy and Export Control) is responsible for the control of the exports to Iran.
--------------------------------
[1] Statistisches Bundesamt: "Foreign Trade. Ranking of Germany's trading partners in foreign trade" (PDF)
[2] Compare Germany Trade & Invest, "Wirtschaftsdaten kompakt: Iran" (PDF)
[3] Compare the report in the Washington Times of 17 November 2007, only online on the blog "wind in the wires". See also the webpage of the National Council of Resistance of Iran.