EghtesadOnline: The Export Guarantee Fund of Iran is offering up to $800 million in guarantees for export to the Eurasian Economic Union member states, the export agency's director said.
"Issuing guarantees for export with the help of peer state organizations in EEU countries is among EGFI supportive measures to help protect Iran's foreign trade," Abdollah Sajjadi said, referring to restrictions on banking ties between Iran and other countries due to the US economic blockade, IRNA reported.
Except for Kyrgyzstan, all EEU members have export credit agencies. "We have signed agreements with them to facilitate trade." The official said covering “political and commercial risks” is among the EGFI measures.
The state-owned agency, affiliated to the Ministry of Industries, Mining and Trade, is in charge of supporting non-oil exporters by providing export guarantees and risk insurance.
EGFI covered export risks worth $2.6 billion in the last fiscal year that ended in March 2020. The amount was up 20% compared to the year earlier.
Iran and Eurasian Economic Union signed a three-year provisional agreement in Astana, Kazakhstan, in May 2018 welcoming Iran’s entry into the union. The arrangement, which lowers or abolishes customs duties, is the first step toward implementing free trade between Iran and the five members.
The average tariff set by the Eurasian Economic Union on Iranian goods as part of a preferential trade agreement is 3.1% and 12.9% for EEU goods entering Iran.
Iran and EEU have listed 862 types of commodities in the three-year provisional agreement. As per the deal, Iran is eligible for easy export and lower custom tariffs on 502 items and the same applies to 360 items from EEU member states.
Iran’s non-oil trade with the EEU hit $1.4 billion during the eight months to Nov. 20, 2020 indicating 11% decline compared to the corresponding period last year.
Non-oil trade with EEU countries accounted for 2.8% of Iran’s total foreign trade over the period under review.
Exports to EEU stood at 1.8 million tons worth $639 million, registering a year-on-year decline of 20% and 6% in volume and value, respectively. Imports were around 2.33 million tons worth $772 million – up 15% in value but down 14% in value YOY.
Exports in value terms accounted for 2.4% of Iran’s total non-oil export during the period or 0.2% annualized growth.