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Banks still afraid of US fines to process Iran deals

23 March 2016 22:55



Despite the January removal of economic sanctions against Iran, global enterprises are still complaining that trade with the country is still difficult as a result of lingering fears of US punitive actions.

Reuters in an exclusive report has quoted business leaders as saying that a key obstacle which is specifically affecting business with Iran is the unwillingness of international banks to process transactions with the country.

US banks are still forbidden to do business with Iran and while lenders based elsewhere are not covered by this ban, major problems remain, emphasized the report. Chief among these are rules prohibiting transactions in dollars from being processed through the US financial system, it added.

The Iranian business community believes the United States has failed to spell out exactly what is permitted and what is not, leading to the uncertainty that makes international banks reluctant to process Iranian-linked transactions, wrote Reuters.

Iranians based in Dubai, historically one of Iran’s main trading partners, complain they cannot get letters of credit to finance deals with their home country, while others have even had their company bank accounts closed in recent weeks.

The problems are also complicating Iran’s plans to sell more oil, as well as recover up to $100 billion in assets that had been frozen by the sanctions in foreign bank accounts, the report added.

The failure by European banks to play their due role in business with Iran has already provoked reactions from several EU leaders and business leaders.

British Prime Minister David Cameron in early March rebuked Barclays for hampering companies trying to export to Iran.

In a strongly worded letter to the bank, Cameron said that Barclays appeared to be operating “in opposition to the policy of the UK government”.

Also, Airbus which sealed an agreement with Iran in January to sell over 100 new planes to the country, has called on EU banks to dispel fears of doing business with Iran.

Iranian officials have also taken their own initiative to urge European banks to open their doors to transactions relating to Iran.

Mohammad Nahavandian, the chief of staff of President Hassan Rouhani, in a visit to London earlier this month called for the facilitation of banking transactions with Iran now that the sanctions against the country have been lifted.

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