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Business France focused on future, despite stalled negotiations

While the Transatlantic Trade and Investment Partnership hangs in mid-air, Robert Blumel is optimistic about French investments being made in the Southeast U.S. and conversely the potential for Atlanta-based start-ups and small-to-medium sized firms in France and Europe.

Having spent the past three years in Atlanta representing the Business France agency and four years beforehand in New York. Mr. Blumel told Advisory Excellence that he has seen “an increased interest from French companies to expand to the Southeast region and especially Atlanta.”

Business France was founded in 2015 to support the international development of the French economy and is responsible for fostering and supporting growth by French businesses as well as promoting and facilitating international investment in France.

As prime examples, Mr. Blumel cited Groupe PSA, a French multinational manufacturer of automobiles and motorcycles, which opened this year its North American headquarters in Atlanta, and Airbus S.A.S.‘s choice of Atlanta for its commercial drone subsidiary.

Granted PSA’s entry into Atlanta is part of a deliberately conservative foray executed with the use of its technology to determine potential markets for its array of products. Nevertheless it’s success in Europe augurs well for its Atlanta-based initiative.

Airbus’ wholly-owned subsidiary Airbus Aerial aims to sell its services to a wide array of industries in their efforts to capture helpful data from above through the use of drones or satellites.

This year Airbus Aerial received a Crystal Peach award from the Atlanta-based French-American Chamber of Commerce for its investment.

The Crystal Peach Awards ceremony is in its 14th year and other recipients for either inbound investment into the Southeast or outbound investment into France included Imerys, a French multinational firm specialised in the producing and processing of industrial materials.

Last fall Imerys USA Inc. celebrated the opening of its global Science & Technology Centre in Suwanee, Ga., one of nine networked centres around the world for the sharing of ideas, equipment and competencies across Imerys.

Mr. Blumel also pointed to the investments in France by Crystal Peach award winners Invest Asset Management SA/France, a branch of Invesco Ltd., an independent investment management company that is headquartered in Atlanta, and Cognira, a start-up specialized in cognitive retail analytics that received this year’s Crystal Peach entrepreneurship award.

He is especially supportive of Cognira’s entry into France which he has been assisting. “They are growing fast,” he said, acknowledging the role played by Business France in its development there.

“I see Atlanta becoming a vibrant start-up scene with very promising companies,” he added. “I have been identifying start-ups with great ideas, services or products and helping them in their business development strategies in France and in Europe.”

Among his activities as the agency’s director for the Southeast, he said that he is responsible for hosting delegations such as the representatives from 11 French paper company suppliers whom he introduced recently to South-eastern paper and board manufacturers.

He also has been selected to participate on juries such as those choosing companies for the Atlanta-Toulouse start-up exchange in 2016 and 2017, the Young Enterprise Initiative in 2016, a start-up competition organized by the French embassy in Washington, and the Crystal Peach Awards committee.

Additionally, he arranged for the CEOs of United Parcel Service Inc., AGCO Corp. and the Coca-Cola Co. to participate in the French International Business Summit held in January that drew to Versailles 140 of the leading executives of the world’s largest firms to learn first hand from French President Emmanuel Macron and the prime minister, Edouard Philippe, France’s desires for international investment.

Whatever delays negotiations over TTIP or tariffs may impose on French-U.S. business relations, Mr. Blumel said that at the local level cross-investment is progressing at a gallop, especially for start-ups and SMEs on both sides of the Atlantic.

“Atlanta-based start-ups are hot,” he said. “And Business France can help them in their business development in Europe and France.”

Mr. Blumel may be reached by email [email protected] or calling 347-567-1140.

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Foreign firms doing business in Iran may face sanctions, US warns

President Donald Trump’s decision to pull out of the Iran nuclear deal has left foreign firms with a choice: Stop doing business in Iran or run the risk of US sanctions.

Multinational companies have billions of dollars tied up in Iran.

In 2016, the European Union exported more than €8.2 billion ($9.7 billion) worth of goods to Iran, while importing almost €5.5 billion ($6.5 billion) from there, according to the European Commission.

But Richard Grenell, the US ambassador to Germany, warned firms that continue to do business there would face consequences.

“US sanctions will target critical sectors of Iran’s economy. German companies doing business in Iran should wind down operations immediately,” he tweeted Tuesday night.

The Federation of German Industries said any attempt to prevent firms from dealing with Iran is contrary to international law. It called on the European Union to “effectively protect European companies from the effects of illegitimate and one-sided implementation of US sanctions.”

Carl Bildt, the former leader of Sweden who is now co-chair of the European Council on Foreign Relations, highlighted that the sanctions would have the biggest impact beyond America’s borders.

“US Iran sanctions are hardly hitting any US companies, but aim primarily at European ones,” he said in a tweet.

Under the nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), the United States committed to ease a series of sanctions on Iran and has done so under a string of “waivers” that effectively suspend them.

Virtually all multinational corporations do business or banking in the US, meaning any return to pre-pact sanctions could torpedo deals made after the 2015 agreement came into force.

“It’s a huge challenge,” said Dr. Sanam Vakil, a professor in the Middle East studies department at the Johns Hopkins School of Advanced International Studies in Bologna, Italy. “The US economy is 10 times that of Iran in terms of size and value, so it makes more sense to do business with the US than the Islamic Republic [of Iran].”

Among US companies, the plane-maker Boeing has signed the biggest deals, and Treasury Secretary Steven Mnuchin said Tuesday that its existing licenses — as well as those of its European competitor, Airbus Group — would be invalidated.

In December 2016, Airbus signed a deal with Iran’s national carrier, IranAir, to sell it 100 planes for around $19 billion at list prices. Boeing later struck its own deal with IranAir for 80 aircraft with a list price of some $17 billion, promising that deliveries would begin in 2017 and run until 2025. Boeing separately struck another 30-plane deal with Iran’s Aseman Airlines for $3 billion.

Boeing has yet to deliver any aircraft to Iran under those deals and said that it will “continue to follow the US government’s lead.”

Airbus, which is subject to the US license because it makes at least 10 percent of its aircraft components in the US, says it will abide by the new US sanctions but it could take “some time” to determine the full impact on the industry. It has already delivered two A330-200s and one A321 to Iran.

French oil company Total SA has been the most aggressive Western oil company to move back into Iran, signing a $5 billion, 20-year agreement with Iran in July. A Chinese oil company also has a deal to develop the country’s massive South Pars offshore natural gas field. Total did not respond to requests for comment.

Adam Smith, a Washington-based lawyer with Gibson Dunn and former Treasury official, agreed that if sanctions are imposed then companies will essentially be forced to choose between the US and Iranian markets.

“It’s a cost-and-benefit question for EU companies,” he said, explaining that firms would find themselves in the same situation as they were in before sanctions were lifted. “It’s a back to the future situation. It would be a world which we have been in before.”

The Treasury said there will be a “wind-down period” of 90 to 180 days to allow companies to complete transactions with Iran to avoid future US sanctions.

However, the Treasury warned that sanctions will come back into full effect after this grace period.

On Aug. 6, the US government will re-impose sanctions on activities such as the acquisition of US dollar banknotes by the Iranian government, Iran’s trade of gold and precious metals and the country’s automotive sector.

On Nov. 4, the US will re-impose sanctions on other activities including Iran’s oil and shipping industries and its energy sector, as well as on transactions by foreign financial institutions with the Central Bank of Iran.

Despite Trump’s announcement, France’s foreign minister insisted that the nuclear deal was “not dead,” adding that French President Emmanuel Macron was scheduled to speak with his Iranian counterpart Hassan Rouhani later Wednesday.

In a joint statement on Tuesday, France, Germany and the UK did not specifically address the issue of US sanctions on European companies, but said their governments remained committed to ensuring the “continuation of the economic benefits of the agreement for the benefit of the world, economy and the Iranian people.”

The UK government updated its guidelines on exporting to Iran shortly after Trump’s announcement Tuesday, saying the re-imposition of the US sanctions against Iran “may have implications for UK businesses and individuals dealing with Iran.” It advised companies to seek legal advice where necessary.

Smith said it was unclear whether Trump would actually impose sanctions on EU companies that continue to deal with Iran, adding that the threat may be strategic, and that the administration could eventually end up granting exemptions.

Vakil said it was now up to Europe to keep the deal alive and protect investment in Iran. “The ball is in the EU’s court,” she said. “I’m skeptical that companies are going to stay in Iran because the risks are so high.”

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Theresa May admits for the first time that Brexit negotiations have been in ‘difficulty’

Theresa May has admitted for the first time that Brexit negotiations have hit “difficulty” as she beseeched European leaders to give her a deal she can sell to the British people.

The Prime Minister explicitly conceded last night that talks were in trouble ahead of her key intervention in Florence two weeks ago, prompting her to try and get negotiations back on track.

She told Angela Merkel, Emmanuel Macron and other EU leaders that there is now the “urgent” need for progress with the threat of the UK crashing out of the EU without a deal looming.

Speaking on Thursday evening at a working dinner with other heads of government in Brussels, Ms May said that at the end of the summer she “recognised the difficulty the process was in”.

“I took stock, listened to what the people in the UK were saying, and what my friends and partners in Europe were saying, and I made a step forward,” she said.

The Prime Minister, who is attending a meeting of the European Council, told leaders that the Florence speech was designed to break the deadlock she had identified and called for a new “joint effort and endeavour”.

“There is increasingly a sense that we must work together to get to an outcome we can stand behind and defend to our people,” she said, adding that when the 27 remaining member states convene tomorrow to discuss Brexit in private “the clear and urgent imperative must be that the dynamic you create enables us to move forward together”.

The PM and world leaders dined on gnocchi and pheasant supreme at the dinner, followed by fresh pineapple.

European Commission chief negotiator Michel Barnier has repeatedly said he is “worried” about “deadlock” in negotiations, but the line from the UK government has always been significantly more optimistic, stressing “concrete progress”.

The PM’s intervention comes as the European Council appears set to refuse to allow the UK to move to trade and future relationship talks – which it has said can only start once “sufficient progress” has been made on settling the divorce bill, Northern Ireland border, and EU citizens’ rights.

The 27 remaining EU leaders will meet tomorrow to discuss Brexit without Ms May, whose address to dinner was not followed by any discussion or debate.

They are expected to tell Britain to come back in December once more progress has been made for another assessment of whether it is ready for trade talks.

Senior UK government officials also admitted that the prime minister was “working against a difficult political backdrop” at home – an apparent reference to Tory MPs who were pushing her for a no deal.

Arriving at the summit on Thursday Angela Merkel said she believed there were “encouraging” signs that sufficient progress could be made in December. Ms May said the summit was a time to take stock of the progress that had been made in talks so far.

Dutch prime minister Mark Rutte however told reporters in Brussels that Ms May had to “come up with more clarity on what she means by ‘other commitments’ in her Florence speech”.

“I phoned her last week, and tried to encourage her to do that and so far she hasn‘t,” he said.

The Prime Minister’s spokesperson told journalists in Brussels: “The Florence speech intended to create momentum and we achieved that. In all our talks with EU leaders they have been responsive and we hope that will continue.”

Other issues such as forest fires and migration have dominated the first day of European Council discussions, with Britain’s departure not even getting a mention in the first press conference between Jean-Claude Juncker and Donald Tusk after hours of talks.