Opportunities for Hong Kong, But Many Restrictions Likely to Continue For Singapore as Iran Sanctions Lift

A "Wealth" of LNG, Other Opportunities for Hong Kong Due to Lifting of Iran Sanctions

A "wealth" of liquefied natural gas (LNG) opportunities for Hong Kong and competition for China are some of the impacts of the lifting of the sanctions by Hong Kong and Singapore against Iran in the near future, according to a new update from Ince & Co.

The international law firm notes that although restrictive measures remain in place related largely to military goods and weapons, the lifting of the sanctions for Hong Kong means "a wealth of opportunities for, amongst others, those Hong Kong entities that are keen to take advantage of opportunities in Iran's oil, gas, shipping, trade and aviation sectors.

"For companies involved in the LNG trade, the opening up of Iran presents significant opportunities, as some reports have predicted that Iran's trade in LNG has the potential to become one of the world's biggest."

Ince & Co believes the outcome of the delisting of various sanctioned entities and individuals by China, however, is a little more problematic.

That's because China has declined to participate in the international embargo on the Iranian oil and petrochemical industry (it only supported trade embargoes connected with nuclear and missile proliferation) and is in fact a significant trading partner; therefore, "the lifting of sanctions by the EU and the easing of sanctions by the US will present China with competition in Iran and the Middle East," according to the update.

Still, Ince & Co acknowledges that China is trying to combat this by promoting its One Belt One Road policy (which focuses on connectivity and cooperation among countries, primarily in Eurasia) "aggressively in this region," and this in turn might generate new business opportunities.

Meanwhile, although Singapore has amended its sanctions law against Iran, Ince & Co points out that "many restrictions on transactions connected with Iran will likely continue to apply" and that companies should exercise extreme compliance vigilance "in respect of all dealings with Iran-related entities."

Last month, the Monetary Authority of Singapore lifted the ban on financial transactions with Iran, a move that could impact the bunker markets due to Singapore's past reliance on Iran for fuel oil imports.