Bankers, Traders Discuss Ways to Fight Sanctions

Apparently at the receiving end of the recent moves aimed at their isolation, chief executives and representatives of several banks attended a meeting of the Money and Capital Commission of Tehran Chamber of Commerce, Industries, Mines and Agriculture on Tuesday to assess the latest impact of the hostile US move on the key banking sector. 

According to TCCIMA news website, Mohammd Reza Jamshidi, the secretary of Private Banks and Credit Institutions Association said banks’ CEOs have held several meetings after the new sanctions set in and are now waiting for guidance from the Central Bank of Iran, according to Financial Tribune.

The Trump administration imposed a near-total embargo on the Iranian economy earlier this month as part of a “maximum pressure campaign” to force Tehran to the negotiating table for a “comprehensive agreement encompassing its nuclear program, missile development and regional policies.” 

The latest restrictions that were eased in 2015 after Iran signed a nuclear deal with the United States and five other world powers target oil exports,  shipbuilding to multinationals that do business in and with Iran.

US Treasury’s Office of Foreign Assets Control, or OFAC, says it has blacklisted a number of Iranian banks, but has said that some lenders would be exempted in order to act as conduits for humanitarian trade. 

Hurting Humanitarian Trade 

Analysts and experts warn however that the far-reaching sanctions on Iranian financial firms could endanger the flow of humanitarian goods as foreign banks and suppliers abandon business ties with their partners in Iran.  

Washington Post recently reported that in recent months, some European banks have refused to process payments even from Iranian firms that are exempt from sanctions out of fear of US penalties. 

At Tuesday's meeting, the head of Iran branches of the Hamburg-based Iranian-European Bank (EIH) said that the biggest hurdles for banks is money transfer into the country because foreign banks have stopped working with their Iranian peers even though some banks remain connected to the SWIFT interbank messaging system. 

"Iran's foreign exchange reserves have been transferred from EIH to another bank but there still are numerous commitments to be made by EIH to its Iranian customers, which the bank fears it may not be able to process," Ali Mehrpour said. 

He, however, said that an agreement has been reached with the Deutsche Bundesbank so that Germany's central bank act as a clearing house instead of EIH for Iran transactions. 

Abbas Deneshvar, international deputy of the state-owned Bank of Industry and Mine, said Iranian banks are no longer able to work with their foreign peers like in the past and are waiting for "politicians and the government" to address the issue without further delay. 

Another official from the privately-owned Tourism Bank expressed concern that Chinese and Russian banks have also stopped processing Iran transactions and said "non-conventional inter-bank" methods should be adopted instead. 

China’s Stance 

Majid Reza Hariri, deputy president of Iran-China Chamber of Commerce and Industries had earlier told the Financial Tribune that Bank of Kunlun had notified Chinese exporters to conclude any unfinished business that they have with Iran before Nov. 1 because after that date the bank would no longer "guarantee" such payments could be conducted . 

According to Hariri progress depends on the so-called Special Purpose Vehicle that Europe says it is developing for Iran trade. 

A Special Purpose Vehicle is the European Union’s  effort to sustain trade with Iran on a non-dollar basis. It was due to be up and running this month, but has faced delays as no European government is willing to host it, supposedly fearing the wrath of the Trump team.

Iran’s Deputy Foreign Minister Abbas Araqchi on Monday appreciated Europe’s full political support for the deal over the past six months but complained that “this period has not been too short for coming up with practical solutions” to problems America has engineered to harm Tehran’s economic ties with the outside world.