The UK government is quietly stepping up efforts in support of UK companies interested in doing business in and with Iran following the suspension of most sanctions, which is expected by the middle of 2016.

At the end of July, UK Trade & Investment (UKTI) circulated a questionnaire by email to about 1,000 UK firms about their interest and priorities in the Iranian market.

“We are doing a lot of preparatory work,” an official said. “Once the embassy opens, we will be able to help companies as much as possible.”

UK Foreign Secretary Philip Hammond said in the House of Commons on 15 July that he hoped the British Embassy will be open by the end of the year.

“We remain committed to reopening our embassies and we will do so once we have resolved some outstanding issues,” he said. “These issues relate to the practical functioning of the mission.”

Iran downgraded its relations with Britain on 28 November, in response to new sanctions put in place by London about the Iranian nuclear programme. The British diplomatic mission was closed after a mob stormed the UK embassy and another British diplomatic compound in Tehran the following day. The British government also ordered the Iranian embassy in London to close. The Iranian embassy in London was reopened in February 2014.

On 25 July, the UK Foreign & Commonwealth Office announced it was no longer advising against all but essential travel to most of Iran.

The UK-Iran trade initiative follows the agreement last month between Iran and the US, China, Russia, France, the UK and Germany that will gradually lead to the relaxation of sanctions on Iran in return for limitations on the Islamic Republic’s nuclear programme. The timeline for this process could lead to all major sanctions being suspended by the middle of 2016.

The UK is lagging behind other Western countries including Germany, which sent a trade delegation to Iran the week after the deal was finalised, and France, which has invited Iran’s President Hassan Rouhani to visit Paris in November.

UK exports of goods to Iran totalled about $170m in 2014. UK firms say this could at least double in the aftermath of the lifting of sanctions. Significantly larger opportunities for UK companies exist in project, financial and other service markets.

London is also working to make it easier for UK companies to make and receive payments involving Iranian counterparts through the banking system. “There is still expected to be quite a lot of difficulties in terms of making payments through US-affiliated banks,” the official said.

The UK-Iran business initiative is being developed by the Foreign & Commonwealth Office, the Treasury, UK Export Finance and UKTI.

“There is a sea-change in the UK government’s attitude to the Iranian market and it is now full-steam ahead for British companies,” a British executive who asked not to be identified tells MEED.