Russian Businesses Seek Trade Advice From Iran, Russia-Iran Exports Up 73%

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Russian businessmen have been seeking out Iranian expertise in getting around Western sanctions, and learning how Iranians live under such trading conditions. A report in the Financial Times discusses how that experience is now being shared to reduce US and EU impact on living standards – including accessing products from the global black ​market, which will be an unwelcome development in Western views at such trade eliminates global watchdogs – and could be potentially dangerous.

Despite sanctions, US products such as iphones are freely available in Iran – meaning that while bilateral sanctions may inflict trade damage, third party resellers are always around – ironically a throwback to US admired entrepreneurial instincts.

 While Chinese brands are prevalent, it is also possible to source goods from leading western consumer companies such as Philips and Bosch. While it is unclear exactly how they arrive in Iran — some may be smuggled, some brought in by individuals from overseas — Iranian traders suggest Turkey and northern Iraq are popular transshipment routes in avoiding US sanctions. It also begs the longer-term question of how effective such mechanisms really are.

Meanwhile, Iran`s imports from Russia have significantly increased since March this year. The Iran Customs Administration (IRICA) has stated that Iran’s imports from Russia had a 45% increase in volume,  and a 73% growth in value compared to the same period last year, another sign that sanctions impositions can be self-defeating as alternative export markets can always be found.

The two countries are also working together to increase trade and develop new mutually beneficial supply chains. The President of Iran’s Customs Administration (IRICA) Alireza Moghadasi and his Russian counterpart Vladimir Ivanovich Bulavin have signed two MoU to further expand and develop mutual trade ties and better coordinate customs issues.

This includes identifying ‘authorized economic beneficial traders’ activists and allow them to use a fast-track “Green Customs” crossing. A new customs agreement between the two countries will be launched to accommodate this.

Moghadasi said in referring to the sanctions imposed by Western countries against Russia, “Since Iran has been put under tough sanctions by the United States and the West, the two countries can cooperate with each other in order to overcome sanctions.” and called for further cooperation of Tehran and Moscow to counter and nullify consequences of sanctions.

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Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at russia@dezshira.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

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