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Iran sanctions threaten Samsung and LG’s grip on local


TEHRAN — Amir Kabir Street in central Tehran is a well-known hub for home appliances. On a recent Monday evening, it was bustling with customers and passersby heading home from work.

It was a typical weekday scene, but there were also signs that it is not entirely business as usual.

A few hundred meters up the street stands a shop selling refrigerators, stoves, microwaves and other kitchen appliances. Until a few days ago, a banner above its glass entrance carried the LG logo, indicating that this was an authorized retailer for the South Korean consumer electronics giant.

Now, the space is empty, and will soon be replaced by a sign for G Plus, a brand made by Goldiran Co., an Iranian company which has been representing LG in the country for years. Like many other changes affecting Iranian businesses, the move is a reflection of tightened sanctions by the U.S.

“There has always been a push and pull to find a way to import the South Korean goods,” Pooria, the 33-year-old owner of the store, who preferred not to disclose his last name, told the Nikkei Asian Review. “Now imports through official companies are cut off,” he said.

Both LG and compatriot Samsung Electronics have assembly factories in Iran, where their imported parts are turned into final products — a strategy to avoid the heavy tariffs on imported finished goods and also fulfill Iran’s desire to boost domestic production and create jobs.

But on Feb. 14 Iran’s state-run news agency IRNA reported that signs and advertisements for LG and Samsung are being taken down following the companies’ decision over the past months to stop cooperating with Iranian companies due to U.S. sanctions.

LG insists nothing has changed.

“LG Electronics is still conducting business as usual in Iran despite the sanctions,” Ken Hong, senior director at LG Electronics, told Nikkei. “The reason for the erroneous coverage is due to the changing of some LG signage to Iranian brands but we are still very much involved in the market.”

Samsung declined to comment.

At the same time, retailers, appliance and electronics industry insiders and consumers in Iran are bracing for disruption.

Seyyed Morteza Miri, the head of the Union for Distributors of Home Appliances, told IRNA that LG and Samsung are “unfairly” refusing to supply products and raw materials.

He said the companies’ representatives — including Goldiron in LG’s case and Sam Electronic in Samsung’s — are now using their infrastructure and technology to manufacture their own brands: G Plus and SAM.

LG and Samsung together control 55-65% of Iran’s market for home appliances, which is valued between $3.2 billion and $3.8 billion, according to various unofficial estimates.

They also have a strong presence in Iran’s market for smartphones and tablets, with Samsung enjoying a commanding 60% share.

Samsung notified its Iranian users in January that paid apps on its store will not be available to them due to financial restrictions, though the handsets, which are imported through numerous channels, will still be available in the market.

At the Charsou shopping mall In Tehran’s downtown electronics hub, dozens of banners still advertise Samsung’s Galaxy Note 10 family. But at an official store selling the South Korean company’s TV sets, fridges, dishwashers and microwaves, change is coming.

“Most items will be unavailable soon … though warranties and after-sales services will continue,” a salesperson told Nikkei on condition of anonymity.

Across the mall, in a similar LG store, a salesperson said the local alternative is gradually finding its place in the market.

“G Plus prices are half of those of LG,” the person told Nikkei. “The two latest models of TV sets especially are performing very well in terms of sales.”

Concerns over quality and prices, however, are prevalent.

“Most stores that I have visited recently said they have limited numbers of foreign products left in stock,” Fatemeh Bahapour told Nikkei, adding she was concerned the scarcity will push the prices higher.

The 24-year-old resident of Tehran said she is in the process of buying appliances for the apartment where she and her fiance will live after they are married this summer.

“I have decided to hold off some of my purchases for now,” she said, adding she was uncertain about the reputation of the new brands replacing LG and Samsung.

The two South Korean companies were reported to rethink their Iran activities in April 2019 after Washington said it would end sanctions waivers for importers of Iranian oil, including South Korea.

This was only one of many steps the U.S. has taken under President Donald Trump to pressure Tehran both politically and economically and force it to negotiate its nuclear and missile programs as well as its regional policy.

Referring to the recent reports of the South Korean companies leaving Iran, Deputy Foreign Minister Abbas Araghchi said the country “will certainly not forget” the companies that abide by the U.S. pressure policy and “leave the Iranian nation during these hard times.”

Pooria, the shop owner in Amir Kabir Street, said LG and Samsung products might still remain available, though they will be smuggled rather than produced domestically or officially imported.

Even this availability might be short-lived, however. “We need to wait and see when the smuggling channel will also be closed,” he said.

Additional reporting by Nikkei staff writer Kim Jaewon in Seoul


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Eliot Engel waters down Hamas sanctions invoice after lobbying from Qatar


A invoice that will sanction sponsors of Palestinian terrorism was watered down considerably after a lobbying marketing campaign by the Palestinian Authority and Qatar focused Bronx Rep. Eliot Engel, chair of the Home Overseas Affairs Committee, public filings present.

When the Palestinian Worldwide Terrorism Help Prevention Act was first launched by Florida Republican Brian Mast in 2017, the invoice known as out Qatar for aiding and abetting terrorists.

“Hamas has obtained vital monetary and navy assist from Qatar. Qatar has hosted a number of senior Hamas officers, together with Hamas chief Khaled Mashal since 2012,” it learn.

“Qatar, a longtime US ally, has for a few years brazenly financed Hamas, a bunch that continues to undermine regional stability,” US Undersecretary for Terrorism and Monetary Intelligence David Cohen stated in language which was additionally included.

The invoice made it out of committee, however by no means onto the ground for a vote.

In 2019 Mast tried once more with an nearly equivalent invoice — besides the robust discuss on Qatar was stripped completely. As well as, a brand new part was added providing quite a few loopholes round sanctions for organizations or people providing “humanitarian help to Hamas, the Palestinian Islamic Jihad, or any affiliate.”

Each Hamas and Palestinian Islamic Jihad have been listed as international terrorist organizations by the US State Division since 1997.

“After it grew to become clear final Congress that the invoice wasn’t going to move because it was presently written these modifications have been made to make it extra doubtless the invoice may get sufficient assist to move,” a spokesman for Mast’s workplace instructed The Put up, who insisted that the invoice remained functionally as sturdy as earlier than.

The 2019 model simply handed the Home on a voice vote in July.

It angered Jewish teams. “There may be definitely no excuse for organizations and international locations to provide cash to a delegated terror group within the title of serving to individuals of Gaza. There are different channels to try this reminiscent of by way of the United Nations,” the Orthodox Jewish Public Affairs Council instructed The Put up.

In each the crucial moments earlier than and after the invoice was reintroduced with out the language, Engel was lobbied closely on the problem.

Between February 7, 2019 and Could 7, 2019 lobbyists for the Palestinian Authority at Squire Patton Boggs hit up Engel’s workplace seven instances to debate “US-Palestinian Bilateral relations.”

On March 19 — two days earlier than the up to date invoice was submitted to the committee — a rep for Engel, Mira Resnick, took a gathering with lobbyists from the identical agency. The day after the brand new language was formally launched, she adopted up with a cellphone name.

A spokesman for the committee denied the conferences had centered on the sanctions invoice, however did affirm Resnick had been lobbied on the problem by the Qatari embassy.

“Eliot instructed me immediately that he was getting numerous strain from the Qataris,” an expert acquaintance of Engel’s instructed The Put up. “The Qataris did a full courtroom press to take away themselves from the invoice.”

“I had conferences with the Qatari embassy,” over the problem, a committee staffer confirmed to The Put up.

“The committee heard from the everyday vary of out of doors pursuits in the course of the legislative course of, however the concept that chairman Engel or the committee caved to anybody’s calls for is simply foolish,” committee spokesman Tim Mulvey instructed The Put up.

“There was bipartisan pushback. There was some vital pushback that led to the invoice type of getting watered down,” stated one other staffer conversant in the matter, who added that legislators from each events on and off the committee had pressed for the removing of the language.

The pushback – a minimum of partially — comes from a concerted Qatari lobbying marketing campaign. Engel is way from alone in fielding inquiries from Qatar’s brokers in Washington. Public filings present a sustained effort by the nation to affect public coverage, spending thousands and thousands of {dollars} and using a number of lobbying outlets for the trouble. They’ve focused dozens of D.C. lawmakers.

Engel didn’t reply to a number of messages looking for remark.

Regardless of an extended and well-documented historical past of financing terrorist organizations, Qatar stays a key US regional ally. The Al Udeid Air Base — the biggest US air base within the Center East — is in Qatar and is residence to roughly 11,000 US navy workers.

“We’ve run our air conflict out of Afghanistan out of there, the air marketing campaign in opposition to ISIS is run out of there,” F. Gregory Gause, a regional knowledgeable and Professor of Worldwide Affairs at Texas A&M College instructed The Put up.

“The Pentagon is all for sustaining shut relations with the Qataris … dropping the hammer on the Qataris actually wouldn’t be sensible politics.”


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