Monday 24 July 2017

US claims it's not deterring foreign banks looking at Iran

A money changer poses for the camera with a US dollar (R) and the amount being given when converting it into Iranian rials (L), at a currency exchange shop in Tehran's business district
A money changer poses for the camera with a US dollar (R) and the amount being given when converting it into Iranian rials (L), at a currency exchange shop in Tehran's business district

Sam Wilkin and Colm Kelpie

The United States is not standing in the way of foreign banks doing business with Iran, a senior US official said yesterday, but his comments appeared unlikely to satisfy frustrated businessmen and Iranian officials.

Most international sanctions against Iran's economy were lifted in January after Tehran implemented a deal with world powers to curb its nuclear program.

But Washington kept some sanctions that were originally imposed over missile proliferation and alleged support of terrorism.

The fear of being caught up in those remaining sanctions has deterred most foreign banks from restoring links with Iran, angering the Iranian government, which complains it is not getting economic benefits it was promised in the nuclear deal.

Bank of Ireland said last month that it would not be removing its restrictions on Iranian-related banking transactions.

AIB declined to comment as to its plans.

Bank of Ireland said that while certain sanction restrictions in relation to Iran have been lifted since January 16, "ongoing complications and risks persist, including the continued application of US primary sanctions".

The latter relate to terrorism and human rights violations.

In a statement, Bank of Ireland pointed out that it adheres to European Union, HM Treasury, United Nations and US Department of the Treasury's Office of Foreign Assets Control Financial Sanctions requirements.

Chris Backemeyer, principal deputy coordinator for sanctions policy at the US Department of State, said US officials were meeting business leaders around the world to assure them that Washington was complying with the nuclear agreement.

"We've tried to make it 100pc clear," Mr Backemeyer said, where he was meeting local and international companies to explain what the US saw as legitimate business with Iran and what it viewed as illegitimate.

He said that while US banks were still banned from dealing with Iran as part of a trade embargo that remains in place - effectively blocking US dollar transactions, since they would ultimately be cleared in the United States - Washington would not penalise foreign banks for doing business in other currencies.

However, Mr Backemeyer also said foreign banks would need to demonstrate they had performed due diligence to ensure they were not doing business with sanctioned entities in Iran, such as companies linked to the Revolutionary Guards.

That appeared unlikely to reassure bankers from Europe, the Middle East and other countries. (Additional reporting Reuters)

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