NEWS,11.07.2013

China central bank mobbed for free loans

About 1 000 hopeful borrowers overran a branch of China's central bank as a rumour spread that it was handing out zero-interest loans, media said on Thursday, illustrating how Chinese financial know-how badly lags growth in banking products.
Police were called in on Tuesday to disperse the crowd, which had gathered for days outside the central bank in Beihai in the southern province of Guangxi, the Global Times said.
The rumour had spread that the People's Bank of China was distributing interest-free loans of between 50 000 yuan ($8 200) and 500 000 yuan.
"The People's Bank of China is a national financial regulator and does not extend deposit or lending services to individuals," Luo Daofang, the deputy head of the Beihai office, was quoted by Beihai television as saying.
The Beihai city government was not available for comment, and the central bank declined to comment when contacted.
As China frees up its financial markets, authorities must step up education of financial products, said Zhang Zhiwei, an economist at Nomura in Hong Kong.
"I worry more about investors buying wealth management products, thinking that these are risk-free, and finding out later down the road that they are not," Zhang said.
Growth in China's wealth management industry has exploded in the last three years as savers search for alternatives outside low-yielding bank deposits. Sales rose by 12.1trn yuan in the first six months of 2012.

China exports dip in June

China's exports fell 3.1% year-on-year (y/y) in June with imports also declining, the government said on Wednesday, in the latest signs of slowing growth in the world's second-largest economy.
The government recorded exports valued at $174.32bn in June and imports worth $147.19bn, down 0.7% y/y, the General Administration of Customs said.
The fall in monthly exports was the first negative figure since January 2012.
China's total foreign trade grew to almost $2trn in the first six months of this year, up 8.6% y/y, the administration said.
China's annual economic growth slipped from 9.3% in 2011 to 7.8% last year, the slowest expansion since 1999.
The government set targets of 8% for trade growth and 7.5% for growth in gross domestic product this year as it aims to rebalance the world's second-largest economy away from its long reliance on exports and investment in infrastructure.

Retailers unveil Bangladesh safety plan

NEARLY 20 North American retailers including Walmart and Gap  unveiled a five-year safety plan for Bangladesh garment factories on Wednesday that would include inspecting every factory within a year.
The announcement in Washington by the Alliance for Bangladesh Worker Safety on Wednesday comes after 1 129 workers were killed in the collapse of a Bangladesh garment plant in April and another 112 people perished in November fire at a Bangladesh factory.
A separate safety plan including coordinated inspections was announced by a group of mainly European brands on Monday.
A few student protesters were outside the building in Washington, where the plan was announced. The group United Students Against Sweatshops handed out fliers, saying "Gap and Walmart: Bangladeshi Workers Reject Your Fake Safety Plan".
Funding for the North American plan is based on how much production each retailer has in Bangladesh; those at higher levels will pay $1m a year for five years.
So far, $42m has been raised for the project. Ten percent of the funds will be set aside to assist workers temporarily displaced by factory improvements or if a factory closes for safety reasons.
The money will also support a non-governmental organisation chosen to implement it. A decision on the NGO should come within 30 days.
The 17 current members of the alliance include: Canadian Tire Corp; Carter's; The Children's Place Retail Stores; Gap; Hudson's Bay Co; IFG; J C  Penney Co; Jones Group; Kohl's; L L Bean; Macy's; Nordstrom; Public Clothing Co; Sears Holdings; Target; VF; and Walmart.
Hong Kong sourcing company Li & Fung, which does business with many of the companies involved, is serving as an adviser. Additional members are expected to join in the future.
"The safety record of Bangladeshi factories is unacceptable and requires our collective effort," member chief executives said in a joint statement.
"We can prevent future tragedies by consolidating and amplifying our individual efforts to bring about real and sustained progress."
Goals include developing common safety standards within three months, sharing inspection results, and getting factories to support the democratic election and operation of worker participation committees.
An independent board chairperson, set to be named in the next few weeks, will oversee the plan. Four retailers and four others will also be on the board.
The plan, Bangladesh Worker Safety Initiative, was developed with assistance from former U S senators George Mitchell and Olympia Snowe, who acted as independent facilitators at the Bipartisan Policy Center.
The group has asked Mitchell and Snowe to verify the effectiveness of the programme over at least the first two years.
Some companies are also set to offer a combined total of over $100m in loans and access to capital to help factory owners improve safety.
The North American group's plan is being backed by the American Apparel & Footwear Association, Canadian Apparel Federation, National Retail Federation, Retail Council of Canada, Retail Industry Leaders Association, and the United States Association of Importers of Textiles & Apparel.
A larger number of mostly European retailers and brands backed a safety accord put together with the help of labour unions.
The group behind that plan includes the world's two biggest fashion retailers, Inditex SA, owner of the Zara chain, and H&M. A small number of North American companies such as PVH signed onto that accord.

UK MP's pay rise angers public

Britain's members of parliament will get a 9 percent pay rise under a proposal announced on Thursday that outraged a public struggling with wage freezes, high living costs and a government austerity drive.
The proposal  which, ironically, was made by a panel created to mend parliament's image after an expenses scandal  is uncomfortable for David Cameron, a prime minister seen by many as part of an out-of-touch elite, adrift from the worries of most voters.
Tabled by the Independent Parliamentary Standards Authority (IPSA), created to distance lawmakers from the pay and expenses system, the proposal cannot be blocked by members of parliament (MPs), even if they were to oppose it.
Cameron's spokesperson said the prime minister "doesn't think MPs' pay should be going up when public sector pay is being rightly constrained".
Deputy Prime Minister Nick Clegg said the plan, to increase MPs' annual pay to £74 000 from £66 396, was "incomprehensible".
The proposal is way above the 2.7% inflation rate and comes at a time of job losses, public sector cuts and low wage growth following a deep recession.
"Everyone has to be treated as fairly and equally as possible in the public sector," Clegg told LBC radio.
Public support for parliament was dented by the 2009 scandal when politicians were exposed boosting their income by claiming expenses for everything from pornographic films and dog food to tennis court repairs.
The public has until 20 October to respond to the proposal before the IPSA makes a final decision on what it said it was a package to end years of "fixes, fudges and failures" over MPs' pay.
Appalled
If no changes are made to the plan, MPs' pay will rise in 2015, the year of the next election. They will lose some perks, including money for evening meals and late night taxis home.
Public workers, unions and campaigners were appalled.
"The idea of hiking MPs' pay when everyone else has been suffering such a squeeze on their earnings is totally unpalatable," said Matthew Sinclair, of the TaxPayers' Alliance, which campaigns for lower taxes.
Unions said pay freezes or rises capped at 1% were widespread since the coalition government came to power in 2010.
"The very idea that MPs should enjoy an exemption and take a 9% increase will rightly cause outrage amongst workers up and down the country," said Dave Prentis, head of Unison, Britain's biggest trade union.
Debate over how much MPs should be paid has raged since they first received an annual salary, of £400, in 1911. That was meant to open politics to people without independent wealth.

Iran building new nuclear site - claim

An exiled opposition group said on Thursday it had obtained information about a secret underground nuclear site under construction in Iran, without specifying what kind of atomic activity it believed would be carried out there.

The dissident National Council of Resistance of Iran (NCRI) exposed Iran's uranium enrichment facility at Natanz and a heavy water facility at Arak in 2002. But analysts say it has a mixed track record and a clear political agenda.

In 2010, when the group said it had evidence of another new nuclear facility, west of the capital Tehran, US officials said they had known about the site for years and had no reason to believe it was nuclear.

The latest allegation comes less than a month after the election of a relative moderate, Hassan Rouhani, as Iran's new president raised hopes for a resolution of the nuclear dispute with the West, and might be timed to discredit such optimism.

The Islamic Republic says its nuclear energy programme is entirely peaceful and rejects US and Israeli accusations that it is really seeking the capability to make nuclear weapons.

But its refusal to curb sensitive nuclear activity, and its lack of full openness with the UN nuclear watchdog agency, have drawn tough Western sanctions and a threat of pre-emptive military strikes by Israel.

Satellite images

The NCRI said members of its affiliated People's Mujahideen Organisation of Iran (PMOI) inside the country had "obtained reliable information on a new and completely secret site designated for [Iran's] nuclear project".

The NCRI, which seeks an end to Islamist theocratic rule in Iran, is the political wing of the PMOI, which fought alongside Saddam Hussein's forces in the Iran-Iraq war in the 1980s.

The NCRI said the site was inside a complex of tunnels beneath mountains 10km east of the town of Damavand, itself about 50km northeast of Tehran. Construction of the first phase began in 2006 and was recently completed, it said.

The group released satellite photographs of what it said was the site. But the images did not appear to constitute hard evidence to support the assertion that it was a planned nuclear facility.

A spokesperson for the dissidents said he could not say what sort of nuclear work would be conducted there, but that the companies and people involved showed it was a nuclear site. The group named officials it said were in charge of the project.

"The site consists of four tunnels and has been constructed by a group of engineering and construction companies associated with the engineering arms of the Ministry of Defence and the IRGC Iran's elite Revolutionary Guards force," the NCRI said.

'No link to nuclear programme'

"Two of the tunnels are about 550m in length, and they have a total of six giant halls."

Asked about the report, International Atomic Energy Agency spokesperson Gill Tudor said in Vienna: "The agency will assess the information that has been provided, as we do with any new information we receive."

A Western diplomat accredited to the IAEA told : "I have heard nothing. My first suspicion is that it is like the 2010 revelation a tunnel facility the Iranians are keeping quiet, but no known link to the nuclear programme."

Iran said in late 2009 that it planned to build 10 more uranium enrichment sites on top of its underground Natanz and Fordow plants, but has provided little additional information.

Refined uranium can provide fuel for nuclear power plants, which is Iran's stated aim, but can also be used to make atomic bombs, which the West fears may be Tehran's ultimate goal.

NEWS,07.05.2013

EU targets banks to help consumers

The European Commission will propose new rules to make it easier for consumers to open and switch bank accounts, as well as see what banking fees they are being charged.

The proposal, to be published on Wednesday and which could become law in the European Union in three years, also requires banks to shoulder the administrative burden when clients switch accounts, such as transferring direct debits.

Officials with knowledge of the draft law said it would also oblige banks to spell out their charges in a standardised way, making it easier for customers to compare.

The Commission wants at least one bank in each country to offer a basic account, allowing people currently outside the banking system to deposit cash and pay bills.

The EU executive will also suggest giving citizens the legal entitlement to open an account, acting out of a growing sense of frustration that efforts to cajole banks into better self-regulation is not working.

Studies by Commission officials showed that banks did not offer enough information on switching accounts and that consumers did not know what fees they paid for banking services.

The studies also found that 58 million citizens in Europe had no bank accounts - including half the populations of Bulgaria and Romania.

The Commission hopes introducing a standard guide to fees for people opening an account, as well as an annual summary of charges and establishing a national comparison website will change this.

Under the new rules, consumers wanting to switch banks would only have to inform the new bank, which would then be obliged to tell gas, electricity and other providers of the changes to account payments.

The proposal will go to EU member states for their approval or possible change before the changes can be introduced.

China braces for surge in gold imports

Chinese gold imports are likely to swell further after rising strongly for a second straight month in March, as investors seek safety from economic uncertainty and after prices plunged to a two-year low last month.

"Physical demand picked up significantly over the last couple of weeks. Consumers and industrial users tend to see price drops as buying opportunities," Zhang Bingnan, secretary-general of the China Gold Association, told Reuters.

"Investment demand should continue to stay strong through the rest of the year because of limited investment alternatives," said Zhang, adding that gold sales and processing volumes both spiked in April. 

He said China's gold consumption in the first quarter probably rose 10% to 15% from 255.2 tonnes in 2012. Net gold flows from Hong Kong to China, the world's number two gold consumer after India, rose to 223.519 tonnes in March from 97.106 tonnes in February, data from the Hong Kong Census and Statistics Department showed on Tuesday (www.censtatd.gov).

In March, Shanghai gold futures fetched premiums of more than $30 to global prices, making it cheaper to buy the metal overseas. April could see imports swell further after the drop in international prices spurred frenzied buying in Asia, leading to a shortage of gold bars and coins in Singapore as well as Hong Kong, which is China's main source for gold imports.   

Demand for gold from India and China is a major factor in global prices, with the World Gold Council saying the two countries account for more than a third of global appetite. China produced 403 tonnes of gold in 2012, but consumption was more than double at 832.2 tonnes.

Gold tumbled to around $1 321 an ounce on April 16, its lowest in more than two years, after a fall below $1 500 and fears of central bank sales led to a sell-off that stunned investors and prompted them to slash holdings of exchange-traded funds.

It stood at around $1 460 on Tuesday.

 "April imports will be stronger than March," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. "The world was buying gold and China was no different at all."

Heavy traffic 

The drop in gold prices has prompted a gold rush in China, with Chinese shoppers flocking to retailers to buy jewellery and gold bars.  

A spokesman for Hong Kong jewellery chain Chow Tai Fook , the world's largest jewellery retailer by market value, told that traffic at its China stores jumped by 50% during the May Day holidays.

The surge in Chinese travellers during the three-day May Day holiday also drove gold sales in Hong Kong to rise by an estimated 50%, with total gold sales from April 29 to May 2 reaching some 40 tonnes, local media quoted Haywood Cheung, president of the Hong Kong Gold and Silver Exchange, as saying. 

The jump in Chinese physical demand also prompted some banks to ship in more supplies from London and Swiss vaults, traders said.

With China's economy still on shaky ground, investors could increasingly be turning to gold as a so-called safe-haven investment. 

China's annual export growth may have picked up slightly in April due to a low comparison from a year ago, while import growth probably eased, a Reuters poll showed, suggesting the underlying momentum for both the domestic and global economies remains tepid. Gold exports to China from Hong Kong hit an all time high  of 557.478 tonnes in 2012.

Companies 'cooking books' to meet targets

Hard-pressed company bosses across much of the world are under so much pressure to deliver on growth that many have resorted to cooking the books, Ernst & Young says in its latest Fraud Survey published on Tuesday.
One in five of almost 3 500 staff quizzed in 36 countries in Europe, the Middle East, Africa and India said they had seen financial manipulation in their companies in the last 12 months, the accounting and consultancy firm said.
In addition 42% of board directors and top managers surveyed said they were aware of "some type of irregular financial reporting".
And despite scandals and regulatory failures in the wake of the credit crunch, almost a quarter of top financial services staff surveyed said they were aware of manipulation and almost 10% of all staff said their companies had understated costs, overstated revenues or used unprincipled sales tactics.
Meanwhile, almost half of the sales staff surveyed across all sectors did not consider anti-corruption policies to be relevant and more than a quarter thought it acceptable to offer personal gifts or services to win or retain business.
In India, over a third felt justified in offering cash - triple the number in Western Europe.
"Our survey shows that to find growth and improved performance in this environment, an alarming number appear to be comfortable with or aware of unethical conduct," said David Stulb, head of E&Y's fraud investigation and dispute services practice.
In Spain, ranked alongside Russia and just below Nigeria and Slovenia, 61% of staff believed companies often exaggerated results, compared with only 7% in Finland.
And E&Y said the vast majority of managers from Norway to Nigeria and Russia to Greece were feeling the pressure to deliver a good financial performance over the next 12 months, despite little optimism that business conditions would improve.
They were now forced to balance the risks of expanding into rapid-growth markets, where winning contracts can go hand-in-hand with corruption, cutting costs further and piling pressure on staff or suppliers - or distorting results, the firm said.
E&Y warned multinationals based in mature markets they could be more vulnerable to the risks of unethical behaviour. One quarter of those asked thought watchdogs in rapid-growth markets focussed more on the behaviour of foreign businesses.
The consultancy called on managers to ask more robust questions focus on key risks, such as poor due diligence accounting checks of intermediaries and associates, and punish unethical behaviour.

Egypt replaces economy ministers

Egypt announced a cabinet reshuffle on Tuesday that removed two ministers closely involved in talks with the International Monetary Fund (IMF) and increased the representation of President Mohamed Mursi's Muslim Brotherhood in government.

The opposition had been demanding the installation of a politically neutral cabinet to oversee parliamentary elections later this year.

Prime Minister Hisham Kandil announced nine changes to his cabinet. These included the appointment of Amr Darrag, a senior official in the Brotherhood's Freedom and Justice Party, as planning minister.

The outgoing minister, Ashraf al-Arabi, had played a central role in talks with the IMF over a $4.8bn loan seen as crucial to easing a deep economic crisis. Egypt has yet to seal a deal with the IMF.

Fayyad Abdel Moneim, a specialist in Islamic economics, was appointed as finance minister, replacing Al-Mursi Al-Sayed Hegazy, another expert on Islamic finance who was appointed in January, the last time Kandil reshuffled the cabinet.

Abdel Moneim received a doctorate from Al-Azhar University in Islamic economics in 1999.

The government has been widely criticised for failing to revive an economy that is in deep crisis because of more than two years of political turmoil.

Another Brotherhood member, Yehya Hamed, was appointed investment minister. The new cabinet includes at least 10 politicians affiliated to the Muslim Brotherhood or the FJP, compared to eight in the old one.

Ahmed Suleiman was named as justice minister, replacing Ahmed Mekky, who resigned last month in protest at efforts by Mursi's Islamist allies to purge the judiciary.

The ministers of interior, defence and foreign affairs were left unchanged.

Crisis sees rise in German immigration

An influx of people from crisis-hit southern European countries like Spain, Italy and Greece has led to the biggest surge in German immigration in nearly 20 years.

The Federal Statistics Office said 1.081 million immigrants flocked to Germany last year, up 13% from 2011 and the highest number since 1995.
Leading the way were arrivals from countries in eastern Europe and from southern eurozone countries, struggling with recession and high unemployment as a result of the currency bloc's three-year old debt crisis.
The number of immigrants coming from Spain, Greece, Portugal and Italy rose by 40% or more compared to the prior year.
"The rise in immigration from EU countries hit by the financial and debt crisis is particularly strong," the Statistics Office said.
Safe haven
Germany has been a rare pillar of strength during the crisis, benefitting from deep structural reforms introduced a decade ago, competitive small-and-medium sized companies and record low interest rates resulting from its status as a safe haven.
Unemployment, at 6.9%, is hovering just above a post-reunification low.
By contrast, more than one in four workers in Spain and Greece are without a job, and youth unemployment in these countries is close to 60%.
This has made Germany, Europe's largest economy, an increasingly attractive destination, despite barriers like the language.
Still, the numbers from southern Europe remain fairly small in total terms compared to those from the east.
A total of 34 109 people came from Greece and 29 910 from Spain in 2012.
That compared to 176 367 from Poland and 116 154 from Romania.

NEWS.09.02.2012.

Iran turns to barter for food as sanctions cripple imports

Cooling towers at a nuclear power plant northeast of downtown Tehran, Iran.

Iran is turning to barter - offering gold bullion in overseas vaults or tanker loads of oil - in return for food as new financial sanctions have hurt its ability to import basic staples for its 74 million people, commodities traders said. Difficulty paying for urgent import needs has contributed to sharp rises in the prices of basic foodstuffs, causing hardship for Iranians with just weeks to go before an election seen as a referendum on President Mahmoud Ahmadinejad's economic policies. New sanctions imposed by the United States and European Union to punish Iran for its nuclear programme do not bar firms from selling Iran food but they make it difficult to carry out the international financial transactions needed to pay for it. Surveys of commodities traders around the globe show that since the start of the year, Iran has had trouble securing imports of basic staples like rice, cooking oil, animal feed and tea. Grain ships have been held at its ports, refusing to unload until payment can be received for cargo. With Iran's real currency tumbling, the prices of rice, bread and meat in Iranian bazaars have doubled or more in dollar terms in recent months. Iranian grain importers have in the past side-stepped sanctions by booking business through the United Arab Emirates, traders said, but this option was cut off by the UAE government in response to sanctions. Iran has been trading oil in currencies like Japanese yen, South Korean won and Indian rupees, but such deals make it difficult to repatriate profits. Deals revealed on Thursday appear to be among the first in which Iran has had to result to offering cashless barter to avoid sanctions, a sign of new urgency as it seeks to buy food and get around the financial restrictions.” Grain deals are being paid for in gold bullion and barter deals are being offered," one European grains trader said, speaking on condition of anonymity while discussing commercial deals. "Some of the major trading houses are involved.” Another trader said: "As the shipments of grain are so large, barter or gold payments are the quickest option.” Details of how the barter deals work are still unclear as the payments problem is so new, and traders did not disclose the exact size of such deals. The economic hardship is being felt in Iran at a pivotal time in its domestic politics and its nuclear diplomacy with the West. The United States and Europe say the sanctions are needed to push Iran to the negotiating table before it produces enough nuclear material to build an atomic bomb. Iran says its nuclear programme is peaceful. Last month it began nuclear enrichment at a new facility deep under a mountain to make it secure from military strikes. Iranian officials deny that sanctions are having a serious economic impact, while also saying that their people are willing to endure any hardship in support of the country's sovereign right to nuclear technology. Officials in Israel, Iran's arch foe, openly say time is running out for air strikes to destroy the nuclear programme if sanctions do not persuade Tehran to back down. Iran’s parliamentary election on March 2 will be its first vote since a presidential vote in 2009, when Ahmadinejad's disputed re-election against a reformist opponent triggered eight months of violent street demonstrations. The Iranian government successfully put that uprising down by force, but since then the "Arab Spring" has revealed the vulnerability of authoritarian states in the region to popular anger fuelled by economic hardship.

Reformists are barely represented in next month's election, having been barred from standing or declaring boycotts. The vote will be hotly contested between Ahmadinejad's supporters and conservative opponents who blame him for economic disarray. Children of Iranian opposition leaders called on the international community to help their voices reach the rest of the world, opposition leader Mirhossein Mousavi's website Kaleme reported on Wednesday. Reformists are planning a rally next week, which could be a rare test of whether the soaring food prices are increasing anger on the streets.The Feb. 14 rally would mark a year of house arrest for Mirhossein Mousavi and Mehdi Karroubi, the candidates who opposed Ahmadinejad in 2009. It was announced on Mousavi's website, Kaleme. The effect of Iran's difficulty processing payments on often opaque international commodities markets can be felt directly on the streets in the form of higher prices and shortages. According to commodities traders in Asia, shipments of palm oil from both the top suppliers, Indonesia and Malaysia, have been halted to Iran because traders fear they cannot get paid. The two countries account for 90% of global supply of the oil, a staple ingredient for products from margarine to sweets.” I can confirm that Singaporean firms have stopped. We don't want to go anywhere near Iran at this moment, it is too risky," said a trader with a listed Singaporean firm that ships Indonesian palm oil cargoes to the Middle East and Iran. A trading source from Saudi Arabia whose firm runs a 16,000-tonne-a-year plant that refines food oil in Iran said the sector was barely operating. A margarine factory owner in Tehran told Reuters on Wednesday he expected to halt production within months because of a shortage of raw materials. The impact could be felt in a Tehran pastry shop.” We are going bankrupt and probably will be closed within weeks," said the owner on Thursday. "All my ingredients come from abroad. Either the prices suddenly doubled or they stopped being shipped. We are doomed.” While the United States and Europe lack the authority without the United Nations to ban dealings by other countries with Iran, their measures can raise the cost of doing business so much that it is no longer profitable for traders.” The objective of current and likely sanctions is very simple: to raise the cost of having anything to do with the purchase or shipping of Iranian petroleum to such an extent that even such potential partners who are formally beyond the legal jurisdiction of the United States or its allies will nonetheless shun doing business with Tehran," said J Peter Pham, with the Atlantic Council, a US think-tank. China, which bought a fifth of Iran's oil exports last year, has cut its imports this year in half, seeking a steeper discount which will hurt Iran's revenues.In public, companies and countries say they will still trade with Iran as long as it remains legal to do so.” Like all the international companies, we do business there, but you have to be very careful," Paul Conway, chairman of US agribusiness giant Cargill told Reuters in an interview on Wednesday. Rahul Khullar, trade secretary of India, one of Iran's main trade partners, said: "If the EU and the US both want to stop exports to that country, please tell me why I should follow suit? Why shouldn't I take up that business opportunity?"Under US pressure, India shut down a payments system for trade with Iran last year. Under a new system, Indian firms are expected to pay for 45% of their Iranian oil imports in Indian rupees to avoid going through international banks. Implementing the system has been stalled while Indian authorities work out whether to subject such payments to tax.Traders revealed to Reuters this week that Iranian buyers had defaulted on payments for Indian rice. Khullar said there were also payment problems in tea, although he did not give details. Indian tea exports to Iran fell by a third last year.Azam Monem, director at McLeod Russel India, the world's largest tea producer, said exporters were waiting for a system to be set up so that Iranian buyers can pay in rupees.Reza Hosseini, a food wholesaler in Tehran, said: "The price per regular package of tea has doubled.... Since Iran is a big importer of tea, the sharp rise in price means that there is a problem with its import.” International shipping firms are cutting back business with Iran. Last year the United States blacklisted major Iranian port operator Tidewater Middle East Co, which operates seven terminals in Iran including Bandar Abbas, Iran's only container port connected to the world's big shipping lines.” I sense that many international shipping companies are challenged beyond what they find can be justified when looking at the potential earnings of trading with Iran," said Jakob Larsen, a maritime security officer with BIMCO, the world's largest private ship-owners' association.” Having said that, I think there are still some who are able to carry on their business in a way that does not breach sanctions and yet ensures a decent return on investment.” Danish shipping company AP Moller-Maersk said this week it had suspended new oil tanker deals with Iran due to the EU measures. German container shipping group Hapag-Lloyd said on Thursday it no longer offered limited services to Iran. It had already ended consignments last year to Tidewater-run ports. Iran faces a bigger challenge if US lawmakers pass sanctions on its main tanker group, the privately run National Iranian Tanker Company (NITC) with a fleet of 40 tankers, or on the state-owned National Iranian Oil Company.” The measure ... would amount to de facto oil and shipping embargos," the Atlantic Council's Pham said. "The mere taint would also have a net negative effect on Iran, driving those fearful of the reach of sanctions to decide not to go through with transactions while giving Iran's remaining partners - one thinks, for example, of Chinese firms - the leverage to drive the price they pay down."