Volkswagen denies US ambassador claims it will end all business in Iran

Volkswagen denies US ambassador claims it will end all business in Iran
Despite remarks from the US ambassador, the German firm - who was set to start selling cars in Iran - said it had not reached a deal over US sanctions.
3 min read
20 September, 2018
The motor giant was set to resume car sales to Iran before sanctions hit [Getty]

Car giant Volkswagen reneged on claims made by the American ambassador to Germany Richard Grenell that it would stop doing business in Iran amid the upcoming sanctions, declining on Thursday to confirm the remarks.

Grenell - known for stirring up controversy in his host country with public sallies on business and politics - told Bloomberg News VW would wind up most business with Iran after weeks of talks with President Donald Trump's administration.

The German behemoth had announced in July 2017 that it would begin selling its own-brand cars in Iran for the first time in 17 years.

A spokesman for the Wolfsburg-based carmaker said it was sticking to its long-standing position that it "obeys all national and international laws as well as export regulations," according to AFP.

"We are also taking into account possible effects related to the reintroduction of US sanctions," he added.

A source familiar with the talks told AFP that VW and the US government had not yet reached a final accord.

Even if it fully complies with US sanctions, VW will still be able to do some business in Iran under a "humanitarian exception", Bloomberg reported.

In May, Trump pulled the US out of the deal it reached with Iran and five other countries in 2015. That accord lifted sanctions against Tehran in exchange for restrictions on its nuclear programme.

Now, the US is reimposing those sanctions, and Grenell has this month tweeted to celebrate chemicals heavyweight BASF and reinsurance giant Munich Re saying they would comply with the trade squeeze.

A spokesman for BASF told AFP on Thursday that it "will continue to do business in Iran and obey all legal rules and regulations."

He added that "around half" the 80 million euros ($93.5 million) in revenue BASF earned in Iran last year came from sectors - energy, automobiles and petrochemicals - affected by American sanctions.

The Ludwigshafen-based group's business with the country represents a tiny fraction of its 64.5 billion euros in annual turnover.

Meanwhile Munich Re has said it would withdraw from Iran in case of sanctions so as not to risk its much larger US activities.

European governments are battling to find ways for their firms to continue trading with Iran, hoping to keep Tehran from renewing its pursuit of nuclear weapons.

Last week, the German government confirmed that Berlin, Paris and London were considering a scheme that would allow Iran to ship goods to European Union countries and receive others in return - without transferring money through international financial channels vulnerable to US sanctions.

Unusually outspoken for a diplomat, Ambassador Grenell irked his German hosts immediately following his arrival in Berlin earlier this year.

In one of his first interviews after taking office, he pressured German firms to withdraw from business with Iran and said he aimed to "empower" anti-establishment conservatives around Europe - drawing accusations of meddling in his host country's politics.

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