Iranian Banking Industry Wants Definite Sanctions Relief

“The removal of sanctions against the central bank, Iranian banks, SWIFT, and any money transfer between them and major foreign correspondent banks, needs to be verified,” Abdolnaser Hemmati, the governor of the Central Bank of Iran, told Bloomberg, referring to restrictions on Iranian access to the Belgium-based global payments system.

Hemmati said that officials from the central bank are directly involved in the talks to ensure US sanctions removal is tangible. Negotiations resumed in Vienna on Friday in an attempt to rebuild the 2015 agreement struck by Tehran and a group of six leading nations.

 After the sanctions were eased in 2016, Iran often castigated the US and European governments for their procrastination and refusing to honor their part of the deal. Tehran urged them to create the conditions for international monetary and financial institutions to reengage with Iran.

In February the Leader Ayatollah Ali Khamenei told the country’s diplomats that they must avoid a similar trap this time around in the Vienna meetings. American sanctions must be removed “in practice, not just in words or on paper,” the Leader said.

“We will make the verification in our own ways,” Hemmati told Bloomberg. “Personally, I am hopeful about the trend of the negotiations.”

US Economic Blockade

The US economic blockade has harmed Iran’s ability to import non-sanctioned goods like food and medicine and fight the coronavirus pandemic. Washington has also obstructed Iran’s $5 billion loan application to the International Monetary Fund.

Iran’s banking system has for decades been largely isolated from global finance both because of sanctions and as it failed to meet international standards on curbing money laundering and terrorism financing -- something even strategic partners China and Russia have said prevents them from working with its lenders.

After the 2015 deal, thousands of Iranian companies secured credit lines with domestic lenders for imports. French energy giant Total SA and German carmaker Volkswagen AG were among the foreign firms to announce agreements to plow money into the sanction-hit economy.

International banks kept their distance, though, even those based in Europe, as American penalties also targeted non-US citizens who worked with circumscribed Iranian entities -- so-called secondary sanctions.

Deals with US companies that were technically permitted, such as plans to purchase dozens of airliners from Boeing Co, either crept forward or were impossible to complete.

Donald Trump, the controversial former US president, piled hundreds more penalties on Iranian lenders, including the central bank, as it ramped up pressure on Tehran.