An interview with the Due Diligence Helpdesk on EU sanctions about the services it provides, the necessary resources, which have to be read in order to comply with EU sanctions on Iran, the level of cooperation with the European-Iranian mechanism for support of trade exchanges and the level of Bulgarian and Romanian interest towards its services
As negotiations over a resurrection of the nuclear agreement between the group of six and Iran advance in Vienna, European firms that try to make business with Iran have an organisation to rely on for consultation in the conditions of the EU sanctions.
The Due Diligence Helpdesk on EU Sanctions is an initiative funded by the European Union, building on the previous action financed under the Partnership Instrument “Due diligence for EU operators related to Iran” and the EU Sanctions Tool. It aims to support EU businesses, in particular small and medium-sized enterprises (SMEs), that are willing to engage with Iran, to do so legitimately, in compliance with EU legislation and within the framework of the Joint Comprehensive Plan of Action (JCPoA).
The Helpdesk provides EU SMEs with free-of-charge due diligence verifications on specific business projects in Iran, assessing their compliance with EU restrictive measures (sanctions). The objective is to reassure EU SMEs and their financing partner institutions regarding the legitimacy of their intended business activities in Iran, thus demonstrating the EU’s continued commitment to the JCPoA.
The EU used to be Iran’s biggest trading partner before the current sanctions regime. It is now Iran’s third main trading partner (accounting for 16,3% of Iran’s overall trade). The volume of EU-Iran trade was 3,7 billion euro in 2019. In 2019 the EU imports from Iran decreased by 92,8% and EU exports decreased by 49,4%. In these conditions the EU is trying to support commercial relations with Iran through organisations such as the Due Dilligence Helpdesk on EU sanctions.
How would you present The Due Diligence Helpdesk on EU Sanctions? How does it serve the European citizens and legal entities? What are the services it provides? Why is it a necessary initiative for anyone who wants to trade or has business interaction with Iran?
EU SMEs carrying out business activities in Iran or with Iranian companies are advised to conduct due diligence checks to ensure that their planned activities do not violate EU restrictive measures (sanctions), which they are bound to comply with by EU law. For example, there is an increased risk of interference with EU sanctions when dealing with dual-use goods, including in the transportation and telecommunications sectors, among others.
The Due Diligence Helpdesk on EU Sanctions provides free-of-charge due diligence checks on EU sanctions compliance for specific business projects. Thus, EU SMEs can be informed whether their initiatives in Iran are in accordance with EU law. Thanks to Helpdesk assistance in providing due diligence compliance documents, EU SMEs can also reassure financial institutions of the legitimacy of their business projects, which would help in obtaining the needed funds.
What are the online resources, which one should read if he/she wants to deal with Iran? To what extent the EU sanctions are valid for the EU-Iranian interaction beyond the trade domain – such as the cultural or the educational domain? What are the resources, which you provide – such as reports, newsletters, webinars, and how can one follow or obtain them?
Our website, www.sanctions-helpdesk.eu, provides a variety of information materials concerning latest developments in the field of EU sanctions and due diligence requirements pertaining to Iran’s business environment. We also publish a regular newsletter which describes the due diligence approaches generally adopted in the emerging business sectors of interest to EU SMEs. The Helpdesk delivers webinars for EU SMEs conducting business in Iran. Of course, it is also through our website that an EU SME can submit an enquiry and thus access a panel of experts to receive confidential first-line information on their specific business case. And all of it is free of charge, as it is an EU-funded project aimed to encourage trade between the EU and Iran.
Outside our website, we could also recommend the following core resources:
- The EU Sanctions Tool-Iran – funded under the Partnership Instrument managed by the European Commission’s Service for Foreign Policy Instruments, provides EU SMEs with the possibility of conducting a preliminary self-assessment of their planned business projects in Iran, in order to determine whether these activities are illegitimate under EU restrictive measures (sanctions). The EU Sanctions Tool is independent of the Due Diligence Helpdesk on EU Sanctions and does not constitute a due diligence check.
- EU Q&A on Due Diligence on Restrictive Measures for EU Businesses dealing with Iran;
- EU JCPOA Information Note, concerning lifted and currently applicable sanctions as well as any exemptions and the necessary requisite authorisations regarding certain activities;
- EU information page and Q&A on the JCPOA Procurement Channel
To what extent The Due Diligence Helpdesk on EU Sanctions is contacted by and provides help for entities from Bulgaria and Romania? What is your message to possible query makers from those countries?
To this date, we have received a large number of enquiries from countries like Austria, Germany, Italy, Belgium, Slovenia, Netherlands, France, Portugal and Sweden, among others. However, the number of requests from Bulgaria and Romania is still relatively lower. We are sure that many Bulgarian and Romanian SMEs are competitive and can find powerful opportunities on the Iranian market. Therefore, we are very much looking forward to assisting Romanian and Bulgarian SMEs with due diligence and high-quality consultancy in order to achieve their full potential on the Iranian market. We are also in the process of focusing our communication efforts more on these countries, to make sure that SMEs and their trade associations are aware of our free-of-charge support.
What is the level of your cooperation with INSTEX – the European-Iranian the Instrument in support of trade exchanges? To what extent do your services ease the EU companies’ usage of INSTEX and are taken into account by this mechanism?
INSTEX is one of our closest partners, as it aims to facilitate legitimate trade with Iran by making payment transactions between Europe and Iran possible. Of course, INSTEX pays the highest regard to making sure that it operates in full compliance with the restrictive measures and law of the EU. Therefore, our services complement each other in many situations, as our due diligence report constitute an additional guarantee for INSTEX’ screening of its beneficiaries. On the other hand, we also always refer our beneficiaries to INSTEX if they have payment-specific questions.
Could you give as an example of how you proceed, when you receive a request for support by an EU company? What are the general procedures and steps, which you undertake in order to serve your mission? And what obstacles do most often arise?
EU SMEs firstly fill-in the Due Diligence Analysis Tool available on our website, providing information about their intended business activity and Iranian business partner. Next, we contact the Iranian business partner asking it to complete a questionnaire and provide supporting documents that enables the Helpdesk to commence due diligence. Following, we carry the due diligence process based on: a) the documents provided by the EU SME and the Iranian partner; b)open-source information and c) on-the-ground market research as well as sanctions-dedicated legal expertise, both in Europe and Iran. Finally, we provide the EU SME with a detailed output report that highlights any potential risk of breaching EU sanctions. This risk report is not shared to any third-party or law-enforcing authority and is kept in full compliance with data privacy legislation.
An obstacle that sometimes appear is that EU and Iranian companies, for business purposes, might need to have a report very fast. However, appropriate due diligence requires between 2 and 5 weeks to complete. As we are currently greatly increasing our turnover times, we also kindly ask EU SMEs to submit their due diligence requests with sufficient prior time before pursuing their transaction.
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