Europe’s Ayatollah Gold Rush

The business sprint to Iran means sanctions will never ‘snap back.’

The U.S. Congress still hasn’t voted on the nuclear deal with Iran, but European companies are already rushing to invest in the Islamic Republic. Italian Foreign Minister Paolo Gentiloni last week led a business delegation to Tehran, where he told his hosts that “our two countries can work together in the fields of trade, commerce and economy,” according to Iranian media.

Iran's President Hassan Rouhani (R) shakes hands with 

Italian Foreign Minister Paolo Gentiloni in Tehran 

August 5, 2015. Photo: Reuters

The same week, Italian investment bank Mediobanca signed a memorandum of understanding with Iran’s Economy Ministry to facilitate future trade between Iran and Italy. Italy’s Development Ministry and Servizi Assicurativi del Commercio Estero, or SACE, the Italian export-credit agency, also signed up. Italian exports to a postsanctions Iran could see a €3 billion ($3.3 billion) boost over the next three years, according to SACE.

WORK EASY PLAY EASY!

As notable, Italian industrial giant Finmeccanica signed a €500 million contract to develop a power plant in Iran. Finmeccanica’s Iranian counterpart in the deal is Ghadir Investment Co. That should raise eyebrows in Washington, since the U.S. Treasury in 2013 identified Ghadir as one of several firms that form “a major network of front companies controlled by Iran’s leadership.”

“Even as economic conditions in Iran deteriorate,” Treasury Under Secretary David Cohen said at the time, “Iranian leaders profit from a shadowy network of off-the-books front companies.” Presiding over the network is Execution of Imam Khomeini’s Order, an entity that according to a 2013 Treasury press release “has made tens of billions of dollars” by, among other things, confiscating “properties in Iran that were owned by Iranians not living in Iran full-time”—in other words, political expropriation. EIKO is at the heart of Supreme Leader Ali Khamenei’s financial empire.

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