Aside from the World Cup, news in recent weeks has been dominated by the meeting in Singapore between President Trump of the USA and the leader of North Korea. It was surprising that such a meeting took place against the extraordinary “e-war” waged between the two and the exchange of increasingly worrying threats over the past year or so. President Trump claims “a great relationship with Kim Jong Un”. The world waits to see whether that personal relationship can deliver the implementation of a highly detailed agreement with North Korea requiring demanding levels of transparency, inspection and verification – personal relationships can achieve a lot in the business world – how will that play out in the world of real politics. For those trading on the global stage an understanding of geopolitics and a ready acceptance that only a limited few truly grasp all of the subtleties is a critical element of sustainable success. No knowledge is dangerous but at times a little knowledge can be more dangerous.
The Singapore rapprochement followed an ill tempered G7 summit which was dominated by steel tariffs and the reverberations of the US Presidential reintroduction of “Iran sanctions”. Iran will be looking at the value of the deal without US participation – and despite the supportive words of EU Governments (and the introduction of blocking legislation), the EU and Iranian Governments can only assist in putting in place a helpful environment for EU-Iran trade. Companies such as Aberdeen and Grampian Chamber of Commerce members will have a large part to play in determining the future EU-Iran relationship. Evaluation of risk and reward is critical in assessing the situation– Iran compliance and country risk measured against the business opportunity Iran offers. Do the new secondary sanctions apply to your proposed Iranian business? When will they apply? Will your Iranian counterparty be a specific sanctions target? Will your supply chain withdraw from Iran business? How will you ensure payment and an ability to access funds on payment? Will you be allowed into USA? Will UK law protect you from any alleged US sanctions breach? All critical questions we are helping our clients answer, click here to view our Iran - US sanctions guide for non - US business.
Which brings us back to that “personal relationship” - Government can do so much - any US-N Korea deal will need international trade to invest in that relationship - but will companies have the appetite to invest in North Korea giving North Korea the commercial and financial dividend it seeks - only time will tell
George Booth, partner and head of Iran practice, Pinsent Masons LLP