German economy minister, Sigmar Gabriel, has visited Iran with a delegation of around 100 industry executives keen to rebuild trade ties.

Addressing poor letter of credit (L/C) availability due to remaining US sanctions putting off major banks from doing business with Iran, continues to be an issue.

Improved relations

Ties between Iran and Germany have been strengthening since international sanctions imposed on Iran were lifted at the beginning of this year.

But the inability to secure L/Cs remains a big issue for smaller German companies according to an exporter of components for wind power facilities in Iran.

Business reaction

Managing director of IMO GmbH told German press that his firm still has to do business via third parties in Iran.

"The sanctions have been dropped, but the tools what we need to do business successfully are still not there," he said.

Banks cautious

German importer of Iranian saffron, Michael Sabet, is more upbeat however, and says his company Miasa GmbH expects the cost of L/Cs to fall by 3 per cent as banks increasingly gear up to do business in Iran.

"The situation is easing. We used to have to wait three to four months to get approval. Nowadays its just a phone call," he said.

Some smaller and specialist banks such as Hamburg-based Europaeische-Iranische Handelsbank do now provide L/Cs but major banks such as Commerzbank and Deutsche Bank reportedly say they remain cautious.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.