French firms trail in economic rush to Iran - executive

Reporting "Asre Khodro", France's main business lobby group, the Medef, is sending a delegation comprising about 130 firms to Iran, including top companies such as Total and Peugeot, from Sept. 21-23. They will be accompanied by the trade and agriculture ministers.

"This visit is very important for us," said Thibault de Silguy, vice-president of construction company Vinci and of the Medef, who will lead the delegation to Iran.

"We have fallen behind, so now we have to make up lost ground," he told reporters. Among countries that already have a lead on French firms, he cited Germany, Austria, China and the United States.

France took one of the hardest lines of the six powers negotiating the nuclear agreement with Iran. But Foreign Minster Laurent Fabius, who travelled to Tehran over the summer to smooth over relations, has repeatedly said he did not believe that would hurt its companies once international sanctions against the Islamic Republic were lifted.

Unlike other visiting Western ministers he did not take any business leaders with him despite meeting key Iranian ministers who deal with the hydrocarbons, transport and automobile sectors, all areas where French firms hope to seal contracts.

The lifting of sanctions could begin in the first quarter of 2016 if Iran meets its obligations under the deal, designed to stop it acquiring nuclear weapons. The accord was endorsed on Monday by the United Nations Security Council.

French firms were once heavily involved in the Iranian market, but European Union and in particular U.S. sanctions adopted in 2011 scared them away.

"There will need to be offers that have a strong local dimension and are competitive in pricing, but also the financial problems need to be resolved," de Silguy said.

French imports from Iran fell to just 62 million euros in 2013 from 1.77 billion in 2011. Exports fell to 494 million euros in 2013 from 1.66 billion in 2011, according to French foreign ministry estimates.

French bank BNP Paribas was fined almost 9 billion dollars in 2014 for transactions violating U.S. embargoes.

French diplomats say their banks are especially hesitant and will wait to see how American lenders react to the lifting of sanctions before supporting French firms in Iran.

"It's a major concern that could be a deal breaker if all Western firms are hamstrung by the banks," said a senior diplomat. "However, if we overcome this hurdle, I think French firms will get their fair share of the pie."

Source: Reuters