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January 2, 2014

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The Gulen Movement Strikes Back: Turkey expert Günter Seufert explains what this power struggle means for Erdogan

December 27, 2013

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December 27, 2013

Prosecutor Overseeing Turkish Graft Inquiry Is Removed From Case

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Drug groups pin hopes on Iran market potential

December 26, 2013

Source: Financial Times

Date: December 26, 2013

By Andrew Jack

When Pfizer sold a small batch of medicines to Iran last year, the process was painful. The pharmaceutical group needed authorisation from the US government, shipped the products through a foreign affiliate and received letters of credit in payment from the Bank of Tejarat to a non-US subsidiary bought in 2011.

Even so, Pfizer was caught by new US Treasury sanctions in early 2012 that froze transactions with the Iranian bank, including its foreign affiliates in France, Tajikistan and Belarus, and it has not yet received full payment. All that for sales of €620,000

Such tortuous procedures, which for other companies often involve payment through intermediaries in the United Arab Emirates, have constricted commercial transactions even for those western suppliers whose products – such as drugs and food – are exempt from sanctions on humanitarian grounds.

Olam International, the Singapore-based commodities trader, which sells wheat, barley and corn to Iran, also highlighted the lack of clarity on payments. “It’s too early to say if these developments will result in wider opportunities for our business given that we have not yet seen changes on the ground in terms of easing of banking sanctions or channels of payment.”

Yet with the prospect of eased controls on trade with Iran coming into effect as soon as next month following the Geneva accord reached in November, many are stepping up their interest in a potentially lucrative market. Michael Tockuss, managing director of the German-Iran chamber of commerce in Hamburg, said the diplomatic agreement had “transformed the mood among businesses”.

“In the days after the agreement we had many companies getting in touch who had either given up on the market or have been working in a very restricted fashion. There is now more optimism. They wanted to know the details of how it will be implemented, in particular regarding the export of petrochemicals,” he said.

Klaus Friedrich, foreign trade expert at the VDMA German machinery association, said the Geneva agreement had not yet resulted in a loosening of sanctions. But he said: “German companies must be prepared to react to protect future business opportunities in the event of a positive outcome to the talks.”

Some companies are already in the process of doing just that. Merck of Germany says it is eyeing the potential given Iran’s large population, and scrutinising local manufacturers to produce two of its medicines. It already sells, through distributors, treatments for cancer, multiple sclerosis, infertility, growth hormone deficiency, and cardiovascular and metabolic disorders.

A report this year by Siamak Namazi, a Dubai-based consultant writing for the US Wilson Centre think tank, highlighted strong potential in Iran and estimated that the pharmaceutical sector generated $3bn in annual sales, with 30 per cent coming from imported drugs.

But Mr Namazi cautioned that the share from western drug companies providing high-quality innovative treatments had fallen as a result of hard currency shortages for medicines, and sanctions on the financial sector which made payment, insurance and shipping difficult.

Other analysts have said the poor intellectual property protection in Iran could restrict investment by western companies. Yet some have been willing to take on the risks. Sanofi of France, which licenses drugs to a local manufacturer, is planning fresh product launches next year. It reported profits in Iran last year of €3.7m last year on sales of €10.2m, on treatments for cancer and cardiovascular conditions.

Novartis of Switzerland last year sold rabies and flu vaccines for €1.5m to an affiliate of the Iranian health ministry, generating net profits of €441,000, and said it expected continued sales in 2013. It signed an official memorandum of understanding in 2010 that could pave the way for accelerated sales, allowing it fast-track registration, market exclusivity, end user subsidies and exemptions from customs tariffs on sales via third party distributors within the country.

The Swiss group said it had an agreement with a local company for licensing and manufacturing in Iran, but a spokesman added: “With the tightened western sanctions on Iran, the flow of medicinal and life-saving products to Iranian patients has been severely affected if not fully ceased . . . we are determined to continue providing access to medicines for our patients in full compliance with US, EU and Swiss trade sanctions and regulations.”

AstraZeneca, based in the UK, reported profits in Iran of $6m on sales of $14m last year, alongside donations of respiratory products in response to health alerts caused by air pollution.

Other pharmaceutical companies remain more circumspect. GlaxoSmithKline, which reported profits of £2.8m in the country on sales of £19.7m last year, said: “We continue to monitor the situation, but it’s too early to comment.” Bayer of Germany said it generated “low double digit million euro sales” in Iran this year, and that the sales volume was “likely to remain on a low level.”

Additional reporting by Scheherazade Daneshkhu in London and Chris Bryant in Frankfurt

 

December 25, 2013

Iran’s friend in the Persian Gulf

December 23, 2013
In sending goods to Iran, Dubai weighs competing interests