What is the current business environment in Iran?

Key Messages

United Nations Security Council and Australian autonomous sanctions on Iran were eased in 2016 following implementation of the Joint Comprehensive Plan of Action (JCPOA) between Iran, China, France, Germany, the UK, the USA and the European Union.

  • The easing of these sanctions has opened up new opportunities for Australian business.
  • However, a number of sanctions and other measures remain in force and many international financial institutions, including the major Australian banks, continue to exercise a high degree of caution in relation to financial transactions with Iran.

The Australian Government is helping Australian businesses to take advantage of new opportunities in the Iranian market, and to understand the associated risks and limitations.

  • Austrade's office in Tehran was formally re-opened in September 2016 to provide in-country advice and assistance to Australian exporters.
  • Austrade is also working with DFAT, the Export Finance and Insurance Corporation (Efic), AUSTRAC, and Australian banks to understand the factors limiting financial sector reengagement with Iran.
  • Australian companies seeking further information about business opportunities in Iran are encouraged to contact Austrade on 13 28 78 (in Australia) or by email at info@austrade.gov.au.
  • For information about Australian and UN sanctions that continue to apply to Iran, please refer to DFAT's Sanctions webpage for Iran.

Changes to sanctions

Australia eased its autonomous sanctions on Iran in January 2016, including the removal of sanctions on:

  • doing business in the oil and gas, banking and finance and transport sectors
  • providing services to the shipping, petrochemical and military industries
  • exporting gold, other precious metals, banknotes and coinage, certain equipment and vessels for the oil, gas or petrochemical industries, and naval equipment and technology.

Australia also lifted a number of designations of Iranian individuals and entities for targeted financial sanctions, and removed restrictions on providing assets to a number of specified Iranian entities.

These changes are in line with the provisions of the JCPOA, which aims to ensure Iran's nuclear program is used for exclusively peaceful purposes.

However, pursuant to United Nations Security Council (UNSC) Resolution 2231 and Australia's autonomous sanctions regime, Australia continues to implement certain sanctions in respect of Iran. Other countries (including the USA) also continue to enforce a range of sanctions, and these sanctions may apply to Australian entities that have a presence in those countries.

Australians considering commercial or other dealings with Iran should familiarise themselves with the operation of remaining UNSC sanctions, Australian autonomous sanctions and sanctions laws of other countries, and seek independent legal advice before making commercial decisions.

US bilateral sanctions in particular can impact on the ability of Australian firms to conduct business with Iran. This can arise if the Australian firm has a US shareholding or a presence in the USA, or through US sanctions that limit the ability of Australian banks to support transactions with Iran. For further information on US sanctions please visit US State; US Treasury.

Australian citizens should also be aware that if they visit Iran, their eligibility to apply for US visas under the Electronic System for Travel Authorisation (ESTA) scheme is likely to be affected.

Recent Development

Elections in May 2017 saw Hassan Rouhani, a moderate, re-elected as President of Iran. Rouhani campaigned on a vision for a more moderate, modern and outward looking Iran. This augurs well for a continuation of his focus on re-opening the Iranian economy to foreign investment and trade, which began in his first term.

Despite the USA imposing new bilateral sanctions on Iran, European countries and their firms continue to aggressively pursue opportunities in Iran. To name a few: in oil and gas, Total and ENI have signed contracts recently; in aerospace, Airbus has orders for 100 aircraft; in automotive, Peugeot, Renault and VW are re-entering Iran; in energy, Ansaldo STS is providing equipment; in steel production Danieli is investing in equipment production; in hotels, Accor hotels has Novotel and IBIS hotels in Tehran, and in transport, Maersk has re-established shipping links to Iran. European foods, beauty products, fashion goods and household goods can all be found in a wide range of stores.

Banking remains a concern but there are new privately owned banks in Iran that are concentrating on ensuring compliance with international regulations and have robust due diligence and risk management processes to enable them to operate with foreign partners and be eligible to obtain a foreign operating licence. The large Iranian Banks are now using western consultants to train staff on international standards and processes associated with the international banking sector.

There is a growing number of international professional services providers setting up in Tehran, providing accounting, audit, legal and training services.

Australian Government - Austrade 

The Australian Government, through Austrade, is working to ensure that Australian businesses are well positioned for the re-opening of the Iranian economy to foreign participation.

Austrade maintained an office in Tehran from 1968 to 2010, and this office was formally re-opened by the Hon Steven Ciobo MP, Minister for Trade, Tourism and Investment, in September 2016.

Through this office, Austrade is re-establishing networks in Iran, identifying areas of opportunity, providing market insights to the Australian business community; and supporting Australian firms entering the market.

Business Opportunities

The easing of Australia's autonomous sanctions on Iran offers new opportunities for Australian business. Austrade considers the following sectors offer early export prospects for Australia:

  • agricultural products – especially wheat, barley and sheep meat
  • mining and resources – equipment, technology and services
  • healthcare and wellbeing
  • water sustainability and management
  • education and skills training.

Opportunities to invest in oil and gas and in mining will interest some Australian firms but the need to understand how new oil contracts will work, how the mining sector will be managed and new investment laws means that investors will need to take a medium-to-long term approach.

Certain sanctions and business risks remain and Australian companies will continue to face a range of market-specific barriers, so the need for market research and due diligence will continue.

Australian companies seeking further information about business opportunities in the Iranian market are therefore encouraged to contact Austrade for assistance.

Companies should also obtain independent legal advice before making commercial decisions with respect to Iran, and consult their financial services provider before entering into commitments.

Further information

  • Detailed information on ongoing UNSC and Australian autonomous sanctions on Iran is available on the DFAT Sanctions webpage for Iran.
  • DFAT also maintains a Consolidated List of all persons and entities subject to targeted financial sanctions or travel bans under Australian sanctions.
  • Australian companies seeking to undertake commercial activities with individuals or entities in Iran, including the export of goods or services that may be subject to Australian or UN sanctions, may submit an inquiry through DFAT's Online Sanctions Administration System (OSAS)
  • Detailed information on the export of defence and dual-use goods can be accessed from the Defence Export Control Office, administered by the Department of Defence.

Further information on business opportunities in Iran is available on the Austrade webpage for Iran.