German Companies Seek More Business in Iraq

German companies are keen to step up business with Iraq, even though it's widely seen as possibly the next target of the war against terrorism.

German exports to the country last year showed a fourfold increase and neither major nor mid-sized companies appear to be put off by lengthy approval procedures.

Last year, the volume of approved exports by German companies rose from DM273 million to around DM 1.2 billion. Though this still puts Iraq near the bottom of German export rankings, many companies are pleased that business is slowly picking up, despite the UN trade sanctions imposed on many products after the end of the Gulf War.

Siemens sold millions in medical supplies last year

The possibility of an extension of the war against terrorism to Iraq does not appear to dampen their enthusiasm. Technology giant Siemens AG, for example, is benefiting from the country's pent-up demand for medical supplies.

In its 2000/01 business year, the group's medical-technology division sold goods worth less than 10 million euros to Iraq. For 2001/02, it forecasts sales of ";more than 50 million euros"

Lengthy approval process before first shipment

But to achieve this goal Siemens needs export approvals. First the German office for industry and export controls has to give the green light before the UN sanctions committee in New York grants final approval.

Foreign companies can only sell goods to Iraq that fall under the so-called oil-for-food program. They include food and products that serve to improve the country's infrastructure and health provisions.

The restrictions are there to prevent the export of products that could be used for military purposes.

"You have to expect the approval process to take around six months," said Wolfgang Dintera, head of sales at the Middle-East division of Siemens medical technology.

But on one occasion, approval from New York for a shipment of ultrasound equipment took two years, he added. The supply of spare parts is subject to the same approval procedures.

It is not always clear to German companies why in the case of certain exports, the UN sanctions committee is either slow in granting approval or it issues a rejection.

"The Americans are trying to stop other countries from trading with Iraq," suggests Uli Burkhardt from the international trade-fair service provider Imag in Munich. But despite the difficulties, Burkhardt has noted a growing interest from German companies in trading with Iraq.

As an index he uses the annual international industry fare, which took place in Baghdad last November.

"It was a very, very big success for German firms," said Burkhardt. A total 112 companies were represented in the German pavilion, a twofold increase from the previous year.

Many of the companies surveyed said they are planning their moves more cautiously as a result of the latest political developments.

But some are hoping that the sanctions against Iraq will be relaxed this year after the UN security council at the end of November held out the prospect of reforming the current sanctions program.