Federal Government gives green light for export guarantees to Iran
New opportunities for Austrian exporters: BMF and OeKB announce resumption of the coverage of business with Iran
The Austrian Federal Ministry of Finance (BMF) and Oesterreichische Kontrollbank (OeKB) discussed the requirements for a resumption of the security of export business and foreign investments in Iran on 11 February. Following a successful completion of the nuclear negotiations and the termination of the economic and financial sanctions on 16 January 2016, export guarantees are available again to Austrian companies.
As of now export guarantees can be issued on certain conditions, such as securities of Iranian banks or government guarantees. Complete rehabilitation of coverages depends on the payment of Iran’s overdues to Austria, which incurred during the period of sanctions. Relating processes have been started and a settlement seems possible.
For the domestic economy, Iran has always been an important trading partner. The provision of adequate securing and financing options shall enable Austrian companies to soon continue or resume their business with Iran.
Iran has a population of 80 million people, which is an enormous potential. As a result of the sanctions, the need for investment into infrastructure is big. An annual economic growth of around 4 percent is expected in the medium term. However, Iran is still classified 7 (high risk) according to the OECD countries category. The cover ratio for political risks is 98 percent.
The government export promotion method provides in the form of export guarantees (guarantees and bill sureties) diverse hedging opportunities of export transactions and allows for attractive financing of international activities. Thus, companies are protected from possible risks and investors are accompanied in their activities abroad.
Since 1950 Oesterreichische Kontrollbank is acting as agent of the Republic of Austria in terms of bank aspects in the assumption of liabilities of the Federation. Founded in 1946 the specialized institution is owned by commercial banks based in Austria. Its services are available to companies and financial institutions as well as institutions of the Republic of Austria.