Iran is open for business: Bankers, bosses and business groups join the foreign secretary as battered British embassy reopens in Tehran

Lauren Fedor
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Foreign secretary Philip Hammond (left) with his Iranian counterpart, Mohammad Javad Zarif
Bosses from Britain’s largest business groups and energy companies broke new ground over the weekend by embarking on an overseas trade mission to Iran, optimistic that thawed diplomatic relations could pave the way for future trade deals.

British Bankers’ Association chief executive Anthony Browne, Institute of Directors (IoD) director general Simon Walker, and Confederation of British Industry (CBI) international director Simon Moore are among the delegates currently in Tehran with foreign secretary Philip Hammond, who reopened the British embassy in the Iranian capital yesterday.

The embassy was closed in 2011 after protesters stormed the compound, ransacking the ambassador’s residence, burning the Union Jack and writing “Death to England” on the embassy’s walls. But Hammond said yesterday that Britain’s relationship with Iran had “improved” in recent years, noting that the nuclear deal that the Islamic republic struck with six major world powers – including the UK and the United States – last month was “an important milestone”.

With the implementation of the nuclear deal expected to lift economic sanctions on Iran, Hammond said yesterday that he wanted make it easier for UK banks to finance trade and investment in the country.

“I think it would be very helpful and very positive if we could begin a dialogue about how we can create conditions which would allow British banks and British financial institutions to engage in the financing of trade and investment in Iran,” Hammond said at a meeting with Iran’s central bank governor Valiollah Seif.

Alluding to the $2.6bn (£1.7bn) in fines paid by HSBC and Standard Chartered to American authorities in 2012 after it was discovered that they had facilitated illicit financial transfers on behalf of Iran, Hammond added: “There is a huge appetite both on the part of our commercial and industrial businesses to engage with the opportunity of Iran opening up and there is huge appetite on the part of our financial institutions to support that activity but of course it has to be done in the proper way.”

Beyond banking, it is widely understood that energy companies are eager to capitalise on Iran’s oil resources. Representatives from Royal Dutch Shell, Amec Foster Wheeler and Weir Group are also participating in the trade mission, as is Treasury minister Damian Hinds.

Hinds’s colleague, commercial secretary Lord Jim O’Neill, a former Goldman Sachs economist, has previously identified Iran as one of the “next 11” emerging markets with the capability of becoming one of the world’s largest economies.

But it remains to be seen whether the British public will be equally enthusiastic. A YouGov poll conducted last month found that two-thirds of Brits support the nuclear deal, yet only one-third said that they were confident the deal would work. When asked whether they considered Iran to be a friend or an enemy of Britain, just 11 per cent said the two countries had a “friendly” relationship, while 55 per cent said Iran was “unfriendly” or an “enemy.”

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