BELGIAN TRADE WITH IRAN

UNCLAS SECTION 01 OF 02 BRUSSELS 000181

SIPDIS, SENSITIVE

E.O. 12958: N/A
TAGS: ECON ETRD ETTC PINR PREL
SUBJECT: BELGIAN TRADE WITH IRAN

BRUSSELS 00000181 001.4 OF 002


Summary
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1. (U) The trade relationship between Belgium and Iran appears
insignificant based on the total value of goods imported and
exported; however, the relationship has steadily grown over the past
few years, and Belgium does play a large role in Iran's total
imports and exports. With over 700 million dollars of exports to
Iran in 2008, Belgium is consistently one of the top 15 exporters to
Iran. Additionally, according to Iranian sources, an 84 percent
increase in imports in 2008 made Belgium Iran's twelfth largest
import source. Goods are shipped between the two countries
primarily through the Port of Antwerp by the Islamic Republic of
Iran Shipping Lines (IRISL). The principle goods traded between the
two nations are heavy machinery, plastics, iron and steel, fruits
and nuts, and pharmaceutical products. End summary.

Commercial Relations between Belgium and Iran
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2. (U) Belgium's exports to Iran have remained stable in the past
few years but experienced a significant uptick in 2008. Belgium's
imports from Iran have substantially increased every year since

2002. World Bank figures show a 29 percent increase in Belgian
exports to Iran from 2007 -- from 545 million dollars to 703 million
dollars in 2008. These figures also show a continued increase in
imports from Iran from 267 million dollars in 2007 to 358 million
dollars in 2008. The principle products exported to Iran are heavy
machinery and equipment and chemical products (particularly
fertilizer and pharmaceutical products). The principle imported
products are metal products and chemicals (particularly organic
chemical products). The level of Belgian investment in Iran remains
extremely low; cumulative Belgian direct foreign investment in Iran
was 754 million dollars in 2007. The Embassy has not been able to
obtain information about the nature of the investment. Belgium's
total foreign direct investment in 2007 was 93 billion dollars
according to the UN Conference on Trade and Development.


3. While trade with Iran is marginal to Belgium as a major European
trading country, Belgium is consistently one of the top 15 exporters
to Iran. The Islamic Republic News Agency claims that from March
2008 to March 2009 the number of Iranian exports to Belgium
increased by 84 percent from the previous year, making Belgium
Iran's twelfth largest import source. The article states that
exported items included steel bars, pistachio, carpets, caviar,
steel products, pipes, melamine, gas condensates, machinery,
chemicals, medical instruments, foodstuffs, minerals and
agricultural products.
Belgian Trade with Iran through the Port of Antwerp
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4. (SBU) The trade between Belgium and Iran is heavily reliant upon
the Port of Antwerp. Until 2009, Antwerp-based shipping company
Ahlers had a subsidiary it jointly owned with the Islamic Republic
of Iran Shipping Lines (IRISL),known as IRISL Benelux. IRISL
Benelux was the subject of U.S. sanctions along with IRISL itself
because IRISL's profits are reportedly used to finance illegal trade
in nuclear items. Ahlers bought out IRISL and changed the name of
the company to Antares in 2009. Ahlers is quite interested in
shaking off the sanctions and has consulted with the Embassy on how
to do that. We have advised them of the proper office through which
to request a de-listing, but have not heard whether they have done
so. Antares and Ahlers still provide port services to IRISL in
Antwerp. IRISL has 72 Iranian ships that enter and leave the port
annually -- approximately 6 ships per month. The trade involves
large amounts of barge traffic that enter Antwerp from other
countries and leave on ships to Iran.
Breakdown of Belgian Exchange
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5. (U) According to the International Trade Centre, Belgium exported
nearly 200 million dollars (28 percent of total exports) of
"commodities not elsewhere specified" to Iran in 2008, the largest
individual category of exports. After such commodities, Belgium
exported 122 million dollars (17 percent) of goods within the sector
"nuclear reactors, boilers, machinery;" this category includes
different kinds of heavy machinery and equipment, not necessarily
related to the nuclear industry. Other important Belgian exports to
Iran include plastics, iron and steel, and pharmaceutical products.
Significant Iranian imports to Belgium include organic chemicals (43
percent),iron and steel (34 percent),nuts and fruits (8 percent),
and plastics (7 percent).
Transactions with Iran
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6. (U) In May 2007, Belgian investment insurer Ducroire/Delcredere
insured a transaction between Iran's Petrochemical Industrial Design
Equipments & Parts Manufacturing Company (Pidemco) and Mhng Supply. This transa
r
supply of capital g of a petrochemical
cten year loan (premium of (. Pidemco purchased steelrrostaal

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Piping Supply (now Ferrostaal),a German company based in Essen with
a steel-manufacturing plant in Antwerp.

Comment
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7. (U) The Embassy occasionally hears of individual deals with Iran
which are the subject of export license decisions by the governments
of Wallonia and Flanders, which have competence for foreign trade
and export controls. We have had good cooperation on transactions
that cause concern. End comment.

GUTMAN