VIENNA: Iran expects to rejoin the international electronic payment system SWIFT three months after sanctions imposed on it are lifted and it will also become easier for foreign firms to take part in privatisations in Iran, a senior Iranian official said.
His remarks suggested Iran’s long isolated but high-potential, energy-based economy will be open for investment once sanctions are removed as a result of its July 14 deal with world powers placing limits on its disputed nuclear programme.
Industry Minister Mohammad Reza Nematzadeh also said Iran’s foreign reserves total between $115 billion (Dh463.5 billion) and $125 billion, including assets in its sovereign wealth fund.
It was one of the most detailed public descriptions of the reserves by an Iranian official. The size of the foreign reserves and the way Iran uses them will be crucial in its bid to rebuild its economy after years of international sanctions.
Iran was barred from SWIFT, crippling its ability to make international bank transfers crucial to foreign trade, due to Western sanctions imposed over fears it was seeking to develop nuclear bombs. It says it seeks only civilian nuclear energy.
Speaking on the sidelines of a business conference in Vienna on Friday, Nematzadeh said foreign banks would gradually be able to re-establish links with Iranian banks as sanctions relief kicks in, which he expected to happen in less than three months.
When asked to clarify the timing, he said he meant three months “from the sanctions (being removed)”.
Iran and the six powers struck the nuclear deal on July 14 and, if UN inspectors confirm Tehran is complying with provisions to curb its nuclear activity, sanctions could begin to be removed later this year.
Nematzadeh also said sanctions relief would smooth the way for foreign companies to take part in planned privatisations of state-owned Iranian companies.
“Some downstream (companies) like petrochemical industries or refining industries, they are all either privatised or the ones left are going to be privatised,” he said.
He stressed that Iran’s national oil company NIOC would not be sold and that the government would retain up to 20 per cent in companies in “important industries”. He did not give details.
TAX BREAKS ON OFFER TO FOREIGN FIRMS Iranian officials also used the business conference to offer tax breaks and other benefits to foreign technology firms to persuade them to set up research and development (R&D) centres in the Islamic republic.
“The government would offer support for R&D investment by foreign firms, and they would be treated just as domestic firms, especially if they were exporters,” Sorena Sattari, Iran’s vice president for science and technology, said.
Nematzadeh said the Iranian government had set up a $1 billion fund for such R&D support for private companies and this was already included in the national budget.
Further, the government will cover up to half of private companies’ research costs out of the running budget, he said.
The Iranian central bank’s foreign reserves, obtained from the country’s oil and gas exports, are around $90 billion to $100 billion, Nematzadeh told the Vienna conference.
The National Development Fund of Iran, which was founded in 2011 and receives a portion of oil and gas export proceeds, has around $20 billion to $25 billion.
In addition, some Iranian government companies and organisations have foreign holdings of about $5 billion to $10 billion, Nematzadeh said.
During the sanctions era, Iran was secretive about the size of its assets, apparently believing that disclosing information could make it harder to defend itself against the restrictions.
US officials have said over $100 billion of Iranian assets abroad are currently frozen by the sanctions, but deputy central bank governor Akbar Komijani disputed that on Thursday. He said only about $29 billion was blocked, of which $23 billion were central bank reserves and $6 billion belonged to the government.
Iran can already access most of the reserves and is using that money to develop its oil, petrochemical and gas industries as well as to finance nearly 60 investment projects through the Chinese government, Komijani said without elaborating.
