Lifting Iran's sanctions would benefit GCC economies

The Institute of Chartered Accountants in England and Wales (ICAEW) suggests that the lifting of Iran sanctions has the potential to significantly boost both that nation’s economy as well as those of neighboring Gulf Cooperation Council (GCC) countries.

During an ICAEW panel discussion, experts said the nuclear deal Iran has struck with western powers could be a boon for other Gulf states, especially the United Arab Emirates. That’s due to the solid trade infrastructure in GCC states including the UAE and Qatar, panelists said.

"Initially, the UAE could play a similar role to that which Hong Kong plays regarding China,” Michael Armstrong, ICAEW regional director for the Middle East, said. “It has the potential to become the gateway to the Iranian market thanks to its historical trade relations with Iran, world-class infrastructure and best-in-class logistics.”

However, easing sanctions against Iran won’t be a clean or quick process and ICAEW experts said it’s important for investors and business leaders to be well-informed on new regulations to navigate the tricky waters.

"Investors need to be aware that sanctions are not lifted yet nor expected to be until 2016, at the earliest,” Armstrong said. “Furthermore, even if this deal is implemented, the U.S. primary sanctions on Iran will still be in place, which absent a specific or general license from the U.S. government would generally prohibit U.S. companies from doing business with Iran."

Still, Iran's economy is expected to grow rapidly in coming years which should help the Islamic republic to become an attractive destination for foreign investors in the medium to long term, according to ICAEW experts.

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