7 Contracts, 40 Billion Euro Deals Made Between Iran and Europe

Airbus €22bn

Iran Air has ordered 118 commercial passenger planes including 12 Airbus A380s, the world’s largest jet airliner.

In total, there are 73 wide-body and 45 single-aisle aircrafts being ordered.

Danieli €5.7bn

The Italian metal industry firm has signed a contract to supply heavy machinery and equipment to Iran.

Saipem €3.5bn

The Italian oil and gas contractor has agreed a deal to revamp and upgrade the Pars Shiraz and Tabriz oil refineries.

An Iranian worker assembles a Peugeot 206 at the state-run Iran Khodro plant near Tehran
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An Iranian worker assembles a Peugeot 206 at the state-run Iran Khodro plant near Tehran. Photograph: Ebrahim Noroozi/AP

Peugeot €400m

The French car-maker made a deal for a joint venture with the Iranian vehicle manufacturer Khodro to modernize a car factory near Tehran, where three new Peugeot models will be manufactured. The two companies worked together before sanctions, and the project will produce 100,000 vehicles a year starting in late 2017.

Total

The oil giant signed a contract with the national Iranian oil company to buy as many as 200,000 barrels of crude oil per day (€6.6m at current prices), according to the French firm’s chief executive, Patrick Pouyanné.

Aéroports de Paris and Bouygues

The French company will assist in the construction of a second terminal at Tehran’s Imam Khomeini international airport.

Vinci

The Italian construction firm will develop a new terminal at Shahid Hashemi Nejad airport in Mashhad, north-east Iran.

Why Shouldn’t American Companies Benefit From Doing Business With Iran?

US embargo remains

“US companies will remain off limits during the duration of this deal,” said Elizabeth Rosenberg, a former senior sanctions adviser in the Obama administration’s Treasury Department. “The US embargo that prevents US people and companies from doing business in Iran remains basically in place.”

The reason why American firms will be essentially locked out from doing business with Iran with some exceptions like sales of commercial passenger airplanes is that the US sanctions regime vis-à-vis Tehran is far broader and dates back much further than that of Europe.

  *So what?  Why Shouldn’t American Companies Benefit From Doing Business With Iran? Because US sanctions regime vis-à-vis (face to face) dates far broader than Europe?  Is that a good reason? Just because it is older, European companies benefit from the deal but US companies will be hindered from doing so. Why?

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“The US really has two kinds of sanctions in place,” explained Christopher R. Wall, Assistant Secretary of Commerce for Export Administration under George W. Bush. Back in the 1990s Washington began to impose various restrictions against Tehran. These direct sanctions penalized American companies for dealing with Iran.

Then around 2010 the United States started a second round of sanctions, this time aimed at non-US companies engaging in business with Iran, so called secondary sanctions. As part of the Iran deal, the US has agreed to lift those secondary sanctions.

European and Asian firms to profit

“However, the direct sanctions will stay in place for the US companies,” said Wall, now the senior international trade partner at the law firm Pillsbury Winthrop Shaw Pittman. “And that means that US companies will not be able to engage in business with Iran because they would be violating US regulations.”

Germany’s economics and energy minister met Iran’s oil minister in July

“It will be European and Asian companies and others that will have the ability to expand trade and investment with Iran,” noted Rosenberg who now heads the Energy, Economics and Security Program at the Center for a New American Security.

Variety of landmines

But non-US firms better not get too giddy and greedy about the potential windfall they could reap; for instance, by investing in Iran’s oil and gas sector without having to deal with any US competitors. That is because even Washington’s remaining direct sanctions have a secondary effect which penalizes international firms if they do business with an entity that remains blacklisted by Washington.

“There is still a variety of landmines that they could accidentally or incidentally if they want to play that game, step on having to do with future business with Iran,” said Rosenberg.

What’s more, even with US companies shut out of trade with Iran there is little appetite in Washington to scale down direct sanctions against Tehran. To the contrary, there is already talk in Congress to ramp up or level new sanctions against Iran, which would violate the terms of the Iran deal and could also have a negative impact on non-US companies.

   *WHY?  We urge US companies to speak with their legal departments, to advise our government in the US not to take our rights as American companies in our democratic society from doing business.  Is that too much to ask?

The group of German industrial firms—representing sectors including oil and gas, chemicals, automobiles, health and construction—were on the second official German business delegation to Iran in as many months.

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WHY SHOUDNT THE US?

Source: http://www.dw.com/en/nuclear-deal-opens-iran-for-global-business-and-shuts-out-the-us/a-18709405

http://www.wsj.com/articles/iran-seeks-money-technology-from-german-firms-1442478397

Finding Human Similarities in Trading Internationally Successfully

When you meet a new person, the way you behave with them will be completely different than with your close friends.  This will be so until you and the new person discover similarities or common grounds.  If these grounds are not discovered then the relationship will seem odd.  If similarities and same grounds are discovered the first thing that occurs is trust and only then can you begin to display only a few of the personalities that your close friends know about.

Trading internationally similar to meeting a new person requires different levels of trust building.  Why different levels?  Or what are the different levels and then we can better see the why.  For one you must come across as person who cares rather than person who wants to sell a product.  If you meet a new person and you feel that they have a inner motivation, like sales in trade terms, or personal gain in social terms, you would hesitate in developing a deeper relationship as you deem them selfish in your mind.  So number one is a genuine care in your contact making without the motive to make a sell but to be able to explain your genuine belief of how your product or service can benefit your contact. Two, one must be punctual. From such long distances the most important form of trust building is punctuality.  Even in normal relationships if you are late to a date or your partner is late for a date, various thoughts will enter the brain, those thoughts may include anxiety, fear, annoyed, which lead to lack of trust for that person  This will be even profoundly found if the so thought negative behavior of being late is constantly continued.  When you mention to you client that you will call them in two hours or email them tomorrow, your timely response will assure them of your attention to detail and ultimately further trust if the good behavior of keeping your word is continued.  Which leads me to the third factor, which is to under promise and over deliver.  If you communicate to your client that you will email them at 6 pm and you send your email at 5 pm, you have delivered the information earlier then you mentioned and thereby over delivering.  You can take someone out to dinner or take them out for a dinner with a flower or a good concert before as a surprise you have over delivered, which in turn gains you their appreciation.  If these factors are continuously met, the relationships flourishes, weather its marriage or business, weather its two siblings or total strangers and the lack of will slowly crumble any, even built relationship.

Author: Ari Kamalizad

Managing Partner of Vizo Solutions LLC

Business Etiquette In the Middle East

Business Etiquette in the U.A.E.

This guide provides a brief introduction to the etiquette of doing business in the United Arab Emirates and Middle East.

Meeting & Greeting

Status is important and must be recognized by using the correct title when addressing someone. It is customary to use Sheikh (chief) (or Sheikha for a woman), Sayed (Mr.), Sayeda (Mrs.), etc. Arabs generally address people by their first names, so John Smith will be addressed as Mr. John.

It is important to greet and acknowledge the most senior person in the room first.

When doing business in the Middle East, handshakes are always used and can last a long time. Etiquette recommends that one waits for the other to withdraw their hand first before doing the same. For a man introduced to a woman, it is advisable to wait and see if a hand is extended. Particularly in public, Muslim women are unlikely to shake a man’s hand. A Western woman introduced to a Muslim man might also wait to see if he offers his hand.

Always use the right hand. Among Muslims, the left hand is reserved for bodily hygiene and considered unclean. The right hand should be used for eating, shaking hands, or handing over an item.

Do not be surprised if your hand is held while you are led somewhere. Holding hands among men is common and does not carry the same connotations as it does in the West.

Many people in the Middle East claim a more modest area of personal space than is usual in the West. Accordingly, it can seem rude for an individual to step away when another individual is stepping closer.

Special respect is paid to older people in many circumstances. This can include standing when older people enter a room, always greeting older people first, standing when speaking to one’s elders, and serving older people first at a meal.

In terms of gift giving, something personal can be a very meaningful touch. It would be appropriate, although not expected, to present a small or token gift to an individual to whom one is being introduced, say for example a book one has written or very much enjoys, a special company memento, or something related to one’s background or hobbies. However, it is not advisable to give a pen or a clock just for the sake of providing a gift. Very senior leaders may or may not provide a gift although it would not be required for one to provide a gift in return.
Gender & Attire

Men should avoid touching and prolonged eye contact with Muslim women.

It is considered improper to inquire about a man’s wife or daughter. It is polite to ask about family or health, but never specifically about any female members. Family life that involves female members is kept extremely private.

The modesty of one’s personal attire is important in the Middle East. Men and women should wear very non-revealing clothes (covering shoulders, arms and legs, and closed-toe shoes) to avoid offending locals.
When visiting religious sites, women must also cover their hair.

In some circumstances shoes should be removed, such as at the entrance to religious sites.
Business is Personal

In the Middle East, doing business revolves much more around personal relationships, family ties, trust and honor. It is therefore important that business relationships be built on mutual friendship and trust. As a consequence of this, if you have friends or contacts in the right places, rules may be bent or things may be done more quickly. The system works on the basis that favors are reciprocated and never forgotten.

Initial meetings are all about relationship-building – building trust and establishing compatibility. One should engage in conversation and try to get to know the person with whom one is doing business.

Age, money, and family connections are all key determining factors of a person’s status. Who you are is usually more important than what you have achieved. It is therefore not uncommon to find many members of one family working for the same company.

In conversation, it is always good to ask about the health and well being of a counterpart’s family. How many children? (Do not ask how many wives?) What are the children doing? Where have they studied or about to study? Taking interest in a counterpart’s family is an important way of building early trust and connection.
Meetings & Negotiations

The working week generally is Sunday through Thursday.

Punctuality is expected of Westerners – even if it is not practiced by locals. Attitudes to time are more relaxed than in the West, therefore it is not unusual to be kept waiting, though Westerners will be expected to be on time.

Meetings are almost always accompanied by coffee and pastries. Hospitality is held in high regard throughout the Middle East, and people will take great pride in lavish shows of hospitality. To refuse it can cause offense. It is proper etiquette to accept beverages offered and to compliment the host on the food and his hospitality.

One should never show the bottom of one’s shoes when sitting in a meeting. This is a sign of great disrespect and is a common mistake by Westerners during meetings. As a general rule, displaying the sole of one’s foot or touching somebody with one’s shoe is considered rude.

Meetings can be chaotic. Always be prepared to exercise patience. Cell phone calls, emails or text messages are taken during meetings and people may enter the meeting room unannounced and proceed to discuss their own agenda.

The Arabs were traditionally a trading people and are excellent negotiators and haggling is prevalent from the market to the board room. Decisions are made slowly. Bureaucratic formalities tend to add to delays.
Religion

All of the Gulf countries, including the UAE, Jordan, and Kuwait, are Muslim countries, as is Egypt. Insulting Islam or the prophets is a serious offense.

Muslims follow the doctrines of the Koran, which forbids consumption of alcohol, pork products, and shellfish. It is best not to consume these in the presence of government or religious officials. It is also prohibited to drink alcohol in public.

Muslims pray five times a day. You will likely hear the calls to prayer, which occur roughly at:

between dawn and sunrise
about half an hour after mid-day
mid-afternoon
right after sunset
an hour and a half after sunset

Other

People in the Middle East may communicate with a vocal emphasis, volume and body language that others might associate with being angry or upset.

Responding to anger or seriousness with light laughter or a smile is common. This must not be seen as a sign that the other person is not taking you or the situation seriously.
Useful Expressions

The customary greeting is “As-salam alaikum,” (peace be upon you) to which the reply is “Wa alaikum as-salam,” (and upon you be peace).

Goodbye is “Ma salamaa”

Please is “Min Fudlek” and thank you is “Shukran”

“Inshallah” means “God willing” and is a common response when agreeing on next steps or a particular course of action.
– See more at: http://usuaebusiness.org/about-the-uae/business-etiquette-in-the-uae/#sthash.e2dquvv8.dpuf

Resource: http://usuaebusiness.org/about-the-uae/business-etiquette-in-the-uae/

Middle Eastern CEOs are more confident about growth than their global counterparts

Middle Eastern CEOs are more confident about growth than their global counterparts

Dead Sea, Jordan – 26 May 2013 –In conjunction with the World Economic Forum on the Middle East and North Africa 2013, PwC Middle East revealed the results of the 2013 Middle East CEO Survey titled “Matching confidence with competitiveness”. 53% % of CEOs in the region are very confident about prospects for business and economic growth over the next 12 months. The depth of confidence sets Middle East CEOs apart from any other region in the world(36%).. This relative optimism is expressed both in terms of confidence about their companies’ growth and the outlook for wider economic growth.

In common with the global trend, confidence among CEOs in the region is down compared to last year’s survey (60%).

Commenting on the findings Hani Ashkar, Middle East Deals Leader at PwC, said: “The high confidence percentage of Middle East CEOs led to a positive outlook for the economy. Compared to their global counterparts, Middle East CEOs are expecting a major employment headcount increase with over two thirds expecting a 5% or more rise.”
Growth Opportunities

Domestic markets present a more open and competitive environment now than in the past. 44% of Middle East CEOs see organic domestic growth as a primary driver in 2013. Alternatively, 25 % view growth stemming from new operations in foreign markets and 13 % from new mergers and acquisitions (M&A), joint ventures or strategic alliances.

“Go abroad “Strategies

Many Middle East CEOs are positioning their companies to take advantage of emerging market opportunities that exists in Africa and Asia. A quarter of the Middle East CEOs appear to have their sights set on this ‘south-south’ opportunity as their main route to growth in the period ahead.

Deals and Strategic Alliances

38% of Middle East CEOs count M&A and strategic alliances, among the top investment priorities for their companies in the upcoming 12 months. A massive 73% target those M&A’s and alliances in their own region, followed by 36% for Africa, 27% for South-East Asia, and 27% for Western Europe.

Risks

41% of Middle East CEOs say that the risk of disruption arising from social unrest tops the lists of their concerns. Based on the survey findings other Middle East CEOs believe that other concerns could pose risk to their business; the two other concerns that stood out are over-regulation (75%) and the shortage of a skilled workforces (69%).

Operational effectiveness

Identifying operation transformation ranks number one on the list of investment priorities for Middle East CEOs, through balancing efficiency with agility.

Commenting on this finding Warwick Hunt , PwC Middle East Senior Partner said “Middle East CEOs are acknowledging the challenges present and are adding a stronger emphasis on strengthening their companies’ operational effectiveness, including investing in roll out of new technologies and addressing talent gaps. According to our findings CEOs today have clearly learned from their experiences, where 25%of the Middle East CEOs plan in the coming 12 months to have direct control of activities by in-sourcing business processes which would ultimately give them greater resilience in the event of disruption.”

Workforce and skills

75 %of Middle East CEOs expressed intent to boost headcount in the coming year, where only 6% anticipate job reductions , as opposed to 23 % globally.
With the continuing focus utlising home-grown skills, 81% of CEOs in the region are planning investments to grow their home market. At the same time, they don’t expect to do it alone, 53% said a skilled workforce should be a top government priority.

Change plans

88 % of Middle East CEOs anticipate making changes in the next 12 months related to customer growth loyalty strategies and talent management. In addition, 81% recognize the need for change in their technology investments.

90 % of respondents are seeking to strengthen their engagement programmes with customers and clients, 84 %with stakeholders using social media and 83 % with the media.

Reference: http://www.pwc.com/m1/en/media-centre/2013/middle_eastern_ceos_more_confident_about_growth.jhtml

Middle East Business Trends

The Middle East and North African (MENA) economies will be driven by unique ‘forces of change’ according to new analysis from Frost & Sullivan. Here are some of the key mega trends that will drive the region by 2025.

URBANISATION

Around 65.4 per cent of the total population (483.5 million) in MENA would be living in urban regions by 2025 with countries such as Bahrain, Kuwait, Lebanon, and Qatar witnessing urbanisation rates of over 90 per cent. Emerging mega corridors (for example, the Cairo-Dakar Highway and GCC Etihad Rail) will foster inter-regional trade that currently accounts for less than 10 per cent of the region’s total trade.

Integrated hubs along these corridors will become the future centres of business and logistics attracting massive infrastructure investment from foreign companies and international governments alike. This explosive growth in urbanisation will drive cities like Abu Dhabi and Cairo to become key economic powerhouses of the future, contributing 48 and 77 per cent to their respective countries’ GDPs in 2020.

GEO-SOCIALISATION

The Middle East has already experienced the power of social networking. The service that has quickly emerged as not just a social community, but also a social platform, that has given voice to the common person.

Frost & Sullivan estimates that close to 75 per cent of MENA’s online population will be involved in social networking by 2015. While current social networking services in the region are basic, the next platform of social networking will rely on geographic services and capabilities such as geocoding and geo-tagging. These collaborative web-mapping techniques will result in new trends of networking, digital marketing, and innovative ways of socialising thus furthering the evolution of interaction between individuals, governments, and organisations.

FUTURE OF POWER

Europe will import 20 per cent of its electricity demand from the MENA through the transcontinental energy and power linking across EU-MENA, a significant portion of which will be from renewable sources.

The Desertec Initiative aims to provide 15 per cent of European electricity demand and a significant proportion of domestic demand in North Africa. Transcontinental power grids will not only help in meeting intercontinental power demands, but also in significantly reducing carbon emissions, meet fluctuations in electricity demand, reduce operating costs, and lower the overall level of environmental pollution in the EU-MENA region. Over the past 20 years, total investment in various Arab Interconnection Projects has reached $2 billion.

WATER-ENERGY NEXUS

The MENA is the world’s most water-scarce region. By 2030, lack of water availability will become a severe constraint to health and socio-economic development in all 17 MENA countries. By 2050, two-thirds of these countries could have less than 200 m3 of renewable water resources per capita per year.

Groundwater and desalination are the only two sources of water for the region, both of which require huge amounts of power. About 30-50 per cent of the desalinated water cost is the energy cost.

The increasing demand on energy to meet water shortages in MENA is likely to have serious consequences on energy security in general and the economies of oil-exporting countries in particular.

FUTURE INFRASTRUCTURE DEVELOPMENT

Global dynamics in the demand for power and energy are changing the course of infrastructure development in MENA. Majority of the infrastructure investments and developments will focus on the power and trade corridors of the region. The MENA countries are undertaking a range of infrastructure projects including building/upgrading state of the art airports, ports, highways, bridges, economic cities, high-speed rail, urban transport facilities, and social infrastructure projects (land reclamation from sea).

FOOD SECURITY

The Middle East, with 58 per cent dependency on food imports, is one of the most vulnerable regions in the world with regard to food security.

The MENA countries spend as high as 0.15 to 0.62 per cent of their GDP on food subsidies. Algeria, Libya, Egypt, Morocco, and Tunisia are already facing food security challenges. Many of the countries that experienced the food demonstrations of 2007-08 are the countries experiencing the Arab Spring – for example, Egypt.

Short-term measures for assuring food security include increasing public sector wages, increasing government expenditure on bread and other food subsidies, reducing tariffs on imported food items, as well as increasing direct cash transfers to the poor. However, these measures place a heavy burden on government budgets.

The Middle East is, therefore, now looking at investing in food production in countries from where food is imported, to secure its food supplies.

Saudi Arabia is already providing funds, credit, and logistics to Saudi investors to invest abroad in agriculture. It is also establishing a strategic reserve for basic food commodities, to meet local needs for food and avoid future food crisis. This is soon likely to be a key trend for all oil exporting
countries in the Middle East.

Gulf Business

Everything You Need to Know: Business in The Middle East

The Middle East is a hub for foreign investors. Enterprising Companies that want to diversify into varied business sectors are wise to evaluate the Middle East as a sound option. It is important to comply with the laws and regulations that govern various regions in the Middle East. Knowing the culture, business etiquette and negotiation methods of Middle Easterners  is essential for business expansion.

Contacts with influential people in the Middle East  is essential for ease of  permits and licenses required to start a business. It can be frustrating to obtain the required documents for starting a business if the proper network is not in place. The best thing to do in such a case is hire a professional company to assist with the development. When you hire the services of an agent you save precious time and also ensure communication and dealing is more effective. Making an impression with officials is of prime importance. As a growing region, they love to deal with companies, individuals and organizations that have clarity in thought and ambitious plans for the future. Gaining trust of  officials is necessary to ensure business proposals are approved in a timely manner.

Vizo Solutions LLC has assisted various companies set up their business in the Middle East.  The network and the working knowledge of the region is essential to growing your business organically.  Vizo Solutions will help in maintaining healthy business relationship with the corresponding partner or officials.  Please be aware that you have to comply with the requirements of the law as per Islamic tradition and thus cannot keep your business or company running on Fridays. All establishments and workplaces remain closed on Friday’s, for prayers to be offered at mosques. The region has an informal approach towards business and often maintain business relationships based on closeness towards a company, individual or organization.