Coupled with the country’s incomplete transition to a market economy and the specific constraints that arise from the current Iranian legal and regulatory environment, the message for those wishing to invest in Iran is to proceed with caution.
Miranda Rushton is senior associate at Carter-Ruck
IRANIAN REGULATIONS
Iran has concluded a number of bilateral investment treaties (BITs) with European Union member states, including Germany and France. These international agreements afford protection to private citizens from one contracting state who invest in another contracting state.
They generally allow foreign investors to refer disputes arising under them to international arbitration, rather than having to pursue claims in the courts of the host state. Some Iranian BITs may be renegotiated in light of the JCPOA to strengthen the protection afforded to foreign investors.
But no such agreements have been concluded between Iran and the UK or the US, although it is understood that the UK may now be considering entering into a BIT as part of an overall programme of investor protection being considered by the government.
As a consequence, UK and US investors cannot rely upon the protections typically afforded to investors against the host state under BITs by being able to refer disputes to arbitration. This therefore places potential investors from the UK and US at a considerable disadvantage.
