On the Path of Croatian-Iranian Economic Cooperation, Payment Transactions Have Become an Obstacle

Croatia can be crucial for Iranian companies to enter the unified European market with half a billion consumers, while Iran could serve as a springboard for Croatia into the Central Asian region, but it is necessary to resolve the issue of payment transactions between the two countries, it was stated on Wednesday at the Croatian-Iranian Economic Forum held at the Croatian Chamber of Economy (HGK).

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The forum gathered around 80 representatives from major Iranian and Croatian companies, Iranian parliamentarians, and representatives from other institutions. Throughout the forum, the friendship between the two countries was emphasized multiple times, but the issue of payment transactions, which limits the realization of already agreed deals, was also highlighted.

In addition to hoping for better intergovernmental trade cooperation between Croatia and Iran, the president of the Iranian Chamber of Commerce, Industry, Mines, and Agriculture, Gholamhossein Shafeei, stated that Croatia is an extremely important country for Iran in entering the European market.

– Croatia is key for Iran in this part of Europe. On the other hand, Iran can be the most important country for Croatia to enter the entire Central Asian region, said Shafeei. However, he pointed out that the trade exchange between Croatia and Iran is still at a low level.

In 2016, Croatia exported goods worth 4.4 million dollars to Iran and imported goods worth 596 thousand dollars.

Shafeei sees potential for cooperation in the oil and gas sectors, railways, automotive industry, electrical energy sector, shipbuilding, food industry, and tourism.

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Shafeei also proposes the possibility of a joint approach by Croatian and Iranian companies to third markets, as well as an agreement on joint transportation of goods. He suggested establishing a direct flight route from Tehran to Zagreb.

The Ambassador of the Islamic Republic of Iran in Croatia, Mohammad Reza Sadegh, also emphasized that both the Iranian and Croatian markets have great potential. He also noted that Croatia can become the main and most important link between Iran and all of Europe. He stated that last year’s visit by President Kolinda Grabar Kitarović to Iran set things in a positive direction.

Minister of Labor and Pension System Marko Pavić stated that he witnessed strong interest in cooperation between Croatian and Iranian companies. However, he also pointed out the issue of payment transactions, specifically the problem of money transactions between Croatia and Iran, which arose due to timely sanctions imposed on Iran, and these transactions are still conducted through third countries.

– The problem of payment transactions is in the process of being resolved, and we consider this the first prerequisite for intensifying economic cooperation. We believe that we will resolve this issue quickly. There are pre-contracts for many companies, great potential, and willingness on both sides, politically and economically, to get things moving. Iran is a market of 80 million inhabitants, they have a very strong shipbuilding industry, steel industry, automotive industry, and it is precisely in this segment that we can cooperate. Croatia has very good companies that offer various quality solutions, said Pavić, adding that he would certainly welcome a direct flight route from Tehran to Zagreb.

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For the president of HGK, Luka Burilović, the current intergovernmental cooperation is at a modest level of several million dollars. On the other hand, he said, some Croatian companies, such as Gredelj, have signed business pre-contracts worth 100 million dollars, and the start of realization is being slowed down by payment transaction issues.

– Negotiations are underway with the Croatian National Bank and the Croatian Postal Bank to resolve this issue as soon as possible, said Burilović, adding that AD Plastik has also signed certain pre-contracts with an Iranian client.