Lifting of Iran sanctions offers Cyprus opportunities

The decision by world powers to lift sanctions against Iran after the isolated South Asian country complied with the terms of a July nuclear deal, offers Cyprus important opportunities which the island has to cautiously exploit. 

According to a source at the ministry of foreign affairs, all sanctions previously imposed in order to discourage Iran from continuing its nuclear programme have been lifted while other sanctions related to its ballistic missile programme will be reviewed in the future. Sanctions related to human rights violations which target specific individuals remain in place. 

The sanctions lifted include banking and financial transactions, insurance, oil and gas trade, shipping and transport, trading of Iranian coins and gold. 

In an official statement, the ministry of foreign affairs welcomed the official announcement of the International Atomic Energy Agency which verified Iran’s compliance with the terms of the agreement between Iran on the one side and the six permanent members of the United Nations Security Council and the European Union on the other. The complete implementation of the joint comprehensive plan of action ensures the exclusively peaceful nature of Iran’s nuclear programme. This is a historic moment, given the long-running diplomatic efforts to reach a comprehensive, long lasting and peaceful solution to the Iranian nuclear issue. 

Investors in the Asian country will be able from now on to invest outside Iran while foreign investors will be able to do the same in the country, and in both cases via Cyprus which in August signed a double taxation avoidance treaty with Iran. The European Union would also favour Iran carrying out business with Europe via countries such as Cyprus, given that Cyprus is strategically located in a region, facilitating such a role. U.S. companies would also welcome the lifting of sanctions against Iran as they anticipate engaging in partnerships with Iranian counterparts. 

Iran is a large market and Cyprus is one of the better-placed EU countries to offer a stable and specific legal and business environment for Iranian companies to establish an EU presence. 

The shipping sector, also affected by the sanctions as the prevented companies from selling naval equipment and other related services, may benefit from the lifting of the embargo, while Cyprus’s banking sector may take advantage of new opportunities by capitalising on its flexibility. “We have a good, flexible business oriented banking system, and here we have advantages compared to other major, traditional banks like Deutsche Bank, HSBC. Everything has to be created from scratch including risk evaluation. If you want to do something like that with a major bank, it’s almost impossible. Cypriot banks have an advantage here”, the former chairman of the Cyprus Shipping Council Eugen Henning Adami said.