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10 May, 2018 11:04

US sanctions against Iran are ‘sword of Damocles hanging over Belgian economy’

US sanctions against Iran are ‘sword of Damocles hanging over Belgian economy’

A new round of US sanctions against Tehran are likely to seriously damage Belgian companies, according to a Wallonia region investment agency.

After the nuclear deal with Iran was reached, many Walloon companies started resuming business ties with the country.

"An average of about 30 companies were present on our joint missions to Iran,”said General Administrator of Wallonia Export-Investment Agency (Awex), Pascale Delcomminette, as quoted by the Brussels Times.

“The country offers interesting prospects for Walloon companies," she added. Despite Iran being placed 99th among Wallonia’s export markets, the Belgian region has investment interests in the country’s agro-industry, mechanical engineering, infrastructure, environment and energy.

US President Donald Trump’s decision to leave the nuclear deal will have a “real impact” on Belgian companies working with Iran and is a 'sword of Damocles' hanging over trade relations with the Islamic Republic, according to Delcomminette.

"It will already have psychological repercussions because the companies will fear reprisals.”

It will also hurt banks, which have been careful in their relations with Iran, added Delcomminette.

“With the new sanctions, with the re-establishment of sanctions, the banks will be all the more reticent to cover operations in Iran,” Delcominette said.

The European Union has to protect its companies affected by the new sanctions, she concluded. The Federation of Enterprises in Belgium (FEB) has also spoken against Trump’s move since it’s bad for Belgian exporters.

“It’s important for Iran to modernize its oil-production, transport, health and energy infrastructure, but also telecoms and banking services,” said FEB Chief Pieter Timmermans. “This decision has dealt a severe blow to any such modernization.”

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