The German government suspended export credits and investment pledges for companies doing business with Iran, in light of the severe crackdown on protests that have occurred across the Middle Eastern country over the past three months.
The Federal Ministry of Economic Affairs and Climate Action said on Dec. 23 that it was taking the step “in view of the very serious scenario in Iran. “
The suspension of investment pledges came into effect promptly, while export credit pledges will be suspended from January, exceptions are made in cases of pressing humanitarian need.
The bilateral industry between Germany and Iran was worth nearly 1. 8 billion euros ($1. 9 billion) in 2021 and totaled about 1. 5 billion euros from January to September this year, according to the most recent figures from the Berlin government.
The suspension of industry promises accompanied by a series of other measures, adding the suspension of a bilateral power dialogue, a control education program and an industry fair program. The Ministry of Economic Affairs also said that Germany Trade and Invest and the German industry delegation in Iran had “reduced their activities to a minimum. “
However, the effect on industrial flows between countries would not be too large, given that no new pledges have been made since 2019.
Trade pledges with Iran had been suspended for many decades but were lifted in 2016 following the implementation of the Joint Comprehensive Plan of Action (JCPOA) nuclear deal, signed between Iran and world powers last year.
Since then, German investment pledges have been granted or extended for a small number of projects, with a total price of around 123 million euros. However, Berlin said it had not won any applications for new investment pledges since 2018.
The scenario is similar for export credit guarantees. There were €176 million in 2017 and €37 million the following year, but there has been nothing since.
However, it adds to the sense that Iran is moving further away abroad due to the heavy crackdown on protesters. The protest movement was sparked by the death in police custody of 22-year-old Mahsa Amini on 16 September.
The suspension of industry promises also marks a further deterioration between Berlin and Tehran, which have followed a downward trajectory in recent weeks.
In early December, the German ambassador to Iran, Hans-Udo Muzel, summoned the Foreign Ministry in Tehran to elicit a protest against what Iranian state media described as “Germany’s continued and unacceptable meddling” in the internal affairs of Iran.
This followed a vote at the United Nations Human Rights Council (UNHRC) last November to open an investigation into the Iranian government’s reaction to the protests; the movement sponsored by Germany and Iceland.
Iranian Foreign Minister Hossein Amir-Abdollahian also criticized Germany, saying on Twitter on Nov. 24 that Berlin was to blame for the “massive violations of human rights” and had been the main supplier of chemical weapons to Saddam Hussein’s Iraqi regime. He said the HRC vote was an abuse of human rights mechanisms “all in the call for a charade of ‘solidarity’ with Iranians. “
Iran has also in the past accused Germany of harboring “anti-revolutionary elements” who trained would-be saboteurs before sending them back to Iran.
On Dec. 12, Tehran included seven Germans among an organization of European establishments it sanctioned, adding former Defense Minister Annegret Kramp-Karrenbauer and Rita Süssmuth, former speaker of the German parliament.