Following lengthy negotiations, giant French carmaker Renault will return to Iran,
Deputy Minister of Industry, Mines, and Trade Farshad Moqimi (Moghimi) announced March 14.
Moqimi was cited by state-run media as saying that a new “mechanism” had been devised for Renault, enabling it to resume manufacturing in Iran despite U.S. sanctions targeting companies doing business in Iran.
Representatives of Renault have neither confirmed nor denied the minister’s statements.
In August 2017, Renault signed a multimillion-dollar deal in Tehran and agreed to raise vehicle production in Iran just days after President Trump signed into law new sanctions against the Islamic Republic.
In the roughly $780 million agreement, Renault promised to produce as many as 150,000 additional cars a year in Iran. The deal was immediately branded as the "largest foreign auto deal in Iran’s history."
The Islamic Republic's state-owned media praised the deal with typical hype, but when the dust settled, Renault never delivered. Less than a year later, chief operating officer of Renault, Thierry Bollore, officially declared that his company would withdraw from Iran as Washington's renewed sanctions against Tehran weighed on the European car manufacturer.
“We are looking to new business opportunities, particularly in Africa, with strong growth to offset the missed opportunities in Iran,” Bollore said.
Car manufacturers are not the only major European companies leaving the Iranian market to avoid being targeted by the new U.S. sanctions imposed on the Islamic Republic.
In August 2018, French oil giant Total also officially left Iran and abandoned its deal to develop a massive natural gas field in the country.
"Total has officially left the contract to develop the South Pars Gas project's phase 11... the process to replace with another company is underway," Bijan Namdar Zanganeh told state-run TV August 20, 2018.
Currently, Germany, France, and the United Kingdom have set up a payment channel with Iran, the Instrument in Support of Trade Exchange (INSTEX), to facilitate continued trade with Iran and circumvent U.S. sanctions. Washington has repeatedly cautioned EU nations against such steps.
Jeremy Hunt, Heiko Maas, and Jean-Yves Le Drian, Foreign ministers of the UK, Germany, and France respectively, announced in January that INSTEX has been officially registered to facilitate "legitimate trade" with Tehran.
The European trio has insisted that INSTEX will focus initially on the sectors most essential to the Iranian population; such as pharmaceutical, medical devices, and foodstuff, excluding oil and other trade. Iranian Foreign Ministry officials have repeatedly expressed hope that INSTEX will not be limited to trade on essential commodities only.
Meanwhile, the Islamic Republic's Supreme Leader, Ayatollah Ali Khamenei, once again cast doubt on INSTEX March 4, saying "The Iranian government should not rely on European countries' proposed packages for solving internal economic problems."
In a meeting with President Hassan Rouhani and his cabinet on Monday, Khamenei went further and warned the government not to be "deceived" by European countries and their "smiles."