Iran-Europe – Opportunities and Challenges
On 5-7 March, the Banking and Business Forum Iran-Europe was held in Tehran. Six Herbert Smith Freehills partners spoke at the conference on a range of topics, from the regulatory requirements of banks in Europe (and how such requirements present challenges to doing business with Iran at the moment) to the opportunities for project finance and sector-specific challenges in mining and renewable power.
Iranian speakers at the conference were very senior, including the Governor of the Central Bank, the Head of the Office of the President and no fewer than eight Ministers and Deputy Ministers, including from the Ministries of Petroleum, Road and Urban Planning and Industry, Mines and Commerce. What was most notable about the speeches made by the Iranians, and comments in subsequent discussions, was how keen Iran is to re-engage with the outside world and to encourage investment into Iran. With a range of sanctions having been lifted on 16 January this year (“Implementation Day”, as it is termed), many Iranians are unclear as to why European banks are not yet prepared to lend to, or open correspondent banking relationships with, Iran.
What is clear, though, is the scale of the opportunity that the re-opening of Iran offers to investors – by way of illustration, annual GDP growth was forecast to be 5% even before the removal of sanctions. Set out in our e-bulletin are our key findings from the conference, together with details of the very real challenges that remain.
Our full e-bulletin is available here.
PwC Middle East Economic Crime Survey 2016
The PwC Middle East Economic Crime Survey 2016 has reported that more than a quarter (26 per cent) of respondents have experienced some kind of economic crime in the past 24 months. The percentage is lower than the global average of 36 per cent, but has risen by 5 percentage points since 2014. Significantly, 20 per cent of respondents did not know whether they had been a victim of economic crime (as opposed to 11 per cent globally).
According to the report, one of the challenges for businesses is closing down opportunities to commit crime. This involves staying ahead of new threats, while developing new ways to prevent, detect and respond effectively to those threats. As controls alone have proven insufficient, it is vital to ensure that organisations have a culture based on strong values, supported by robust policies and ethics and compliance programmes.
Egyptian auditor dismissed for making allegations of corruption
President Abdel Fattah al-Sisi has dismissed a top auditor, Hesham Geneina, after he made a series of allegations of government corruption in newspaper interviews late last year. A presidential commission appointed by Sisi had concluded that Geneina misled the public when he alleged that government corruption cost Egypt approximately US$ 76 billion over a four-year period. Although Sisi has made combating corruption a government priority, Geneina’s dismissal has led some to question Egypt’s commitment to this.