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  • Armenia And Sanctions Against Iran

    ARMENIA AND SANCTIONS AGAINST IRAN
    Samvel Avagyan

    news.am
    July 29 2010
    Armenia

    Can sanctions against Iran affect Armenian-Iranian economic ties?

    Numerous sanctions were applied against Iran before, which, however,
    did not affect the bilateral economic ties.

    The only exception was the IT sector: the European Union (EU) forced
    Armenia to restrict the export of dual-purpose products for Armenian
    hi-tech products not to be found in Iran. Also, Armenia must not
    become a country for transit of hi-tech products to Iran. To specify,
    we would like to inform the reader that the "restriction" applies
    even to personal computers. The restrictions hindered the development
    of Armenia's IT sector, but the external pressure outweighed the
    country's capability to defend its interests.

    However, Armenia and Iran found new fields of cooperation - first of
    all, the energy sector. An Iran-Armenia gas main was constructed, and
    a number of large-scale projects are being implemented or elaborated.

    Among them are an HPP construction project in Meghri, an oil-products
    pipeline, a high-voltage transmission line and an Armenia-Iran railway.

    The EU's unprecedented sanctions are to take effect on October 27.

    They are aimed at the Iranian energy sector. Specifically, the import
    of oil-and-gas production technologies to Iran will be banned. Iran's
    oil-and-gas- production sector needs modernizing. Since the EU issues
    no warning to Iran's allies, the Armenian-Iranian energy cooperation
    will hopefully not be affected. Moreover, Iran is increasingly
    interested in developing energy integration with Iran. The question
    is whether Iran will sponsor the programs, as Armenia is unable to.

    The sanctions will also be applied against the Iranian financial
    sector. As far back as June 9, the U.S. Security Council sanctions
    called on all the nations to be careful about all the money transfers
    effected by means of Iranian banks. The U.N. also called on it
    member-states to prevent the opening of Iranian bank branches The
    Mellat bank is operating in Armenia, which is effecting transactions
    with official capital. The bank's assets total 16.2bn AMD (about U.S.

    $45m). Of course, this is not a scale posing a threat to the nuclear
    security of the U.S. and Europe. The bank's main task is to serve
    Iranian businessmen's accounts in Armenia.

    It should be remembered that 30% of the 3,700 companies founded in
    Armenia are Armenian-Iranian joint ventures though some of them are
    not actually operating. The aim of the EU financial sanctions is not
    prohibiting, but establishing strict control over Iranian companies'
    financial transactions in European banks. Specifically, a transfer
    exceeding â~B¬10,000 is to be accompanied by an explanatory note. A
    transfer exceeding â~B¬40,000 requires official permission. The
    restriction, of course, applies to the Mellat bank as well. We are not
    well informed of the bank's cooperation with European banks. However,
    it will not affect the Armenian banking system.

    Therefore, in principle, the U.N. and EU sanctions will not have any
    serious impact on the Armenian economy.




    From: A. Papazian
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