0448 GMT March 21, 2018
The plane-maker is in advanced negotiations to sell at least 20 E195 jets with a total list price of more than $1 billion, while the bus manufacturer is in talks to supply part of the 27,000 units Tehran is seeking, according to Mahdi Rounagh, a senior Iran's Foreign Ministry official and until recently the deputy ambassador in Brasilia, reported Bloomberg.
The problem is that Brazilian banks are reluctant to deal with Iran for fear of US penalties, even after Washington lifted restrictions on non-US banks. Their concern is that their US assets and subsidiaries could classify them as US banks, according to two senior bank executives in Brasilia. Business and government officials say Brazil must try harder to find alternatives, such as using smaller European banks that don't operate in the US.
"We have been in contact with several banks to explain that it is possible to find solutions that would benefit not only Brazilian companies but the banks themselves," Rodrigo de Azeredo Santos, Brazil's top diplomat for trade, said in an interview. He didn't name the banks because the discussions are not public. "We are talking about big contracts."
US Secretary of State John Kerry said in remarks before meeting Iranian Foreign Minister Mohammad Javad Zarif in April, "We have no objection and we do not stand in the way of foreign banks engaging with Iranian banks and companies, obviously as long as those banks and companies are not on our sanctions list for non-nuclear reasons."
The US Embassy in Brasilia did not respond to repeated requests for comments on sanctions on Iran and their implications on Brazilian trade deals.
Most nuclear-related sanctions started to be eased last year under a historic deal with major powers.
Outside of Brazil, PSA Group this year agreed in principle to two joint-ventures to assemble cars in Iran after withdrawing from the country in 2012. Iran's Industry Minister Mohammadreza Nematzadeh said in June he hopes to sign contracts with a German carmaker soon.
"Of course we have every interest in promoting trade with Iran, it's an attractive market," Brazilian Foreign Minister Jose Serra told Bloomberg on the sidelines of an event in New York in September. "We're all working hard on this."
Embraer has been courting Iranian carriers. In late August it invited 200 Iranian businessmen and politicians to showcase one of its jets at a Tehran airport, according to a company statement. Iran's Economy Minister Ali Tayyebnia is scheduled to head a business delegation in a visit to Brazil in November, according to both foreign ministries.
"Embraer is keen to develop successful relationships with Iran's airline operators," the company said in the e-mail. The company is also seeking an export license from Washington to sell Iran its jets, which contain US-made components.
Boeing and Airbus last month obtained such licenses to renew Iran's aging fleet of aircraft. Airbus said in an e-mail that it expects to begin delivering this year and that the deal's financing is confidential.
An executive for Marcopolo said there are still issues on how Iran could pay Brazilian companies. "There are financial obstacles regarding letters of credit," said Ricardo Portolan, the company's export manager.
To keep up with its competitors, Brazil needs to be more creative in finding financing alternatives, said Senator Armando Monteiro, who headed a business delegation to Tehran last year when he was trade minister. "We could use oil as a currency or be paid through investments in refinery plants in Iran, for example," he said.
Brazilian banks have been in touch with US Treasury officials and are exploring ways to set up triangular transactions via smaller European banks, according to Azeredo.