Breakthrough in Removing Iran-China Banking Hurdles

EghtesadOnline: After weeks of speculation about the banking problems of Iranian students and businesses in China, which ranged from difficulties in conducting transactions to the total closure of accounts, a breakthrough has been made to end those concerns.

News ID: ۷۴۴۷۸۳

31 January 2018

While the Chairman of Iran-China Chamber of Commerce Asadollah Asgaroladi had this week been quoted by local media that Iranian bank account closures were being resolved and that certain Chinese banks were calling on Iranians hit by the closures to reopen their accounts, a Central Bank of Iran official on Tuesday confirmed that the matter has been entirely resolved.

Hossein Yaqoubi, director of CBI's International Department, told IRNA that the reopening of bank accounts for Iranian nationals has started from a week ago and Chinese banks are unblocking these accounts upon confirming the identity of their Iranian customers.

Reports of banking restrictions for Iranian nationals first surfaced in the summer when some Iranian expatriates said their accounts with three lenders, namely Agricultural Bank of China, Industrial and Commercial Bank of China and China Merchants Bank, had been closed, according to Financial Tribune.

The closures were attributed to new pressures from Washington and also more stringent ant-money laundering measures adopted by Chinese lenders in line with the Financial Action Task Force requirements.

Ever since the news emerged, Tehran began to engage with Beijing, a major political and economic ally of the Islamic Republic, through diplomatic channels to resolve the issue.

Yaqoubi explained that the recent problems had emerged mainly due to US pressures for enforcing closer monitoring of customers by Chinese banks, which led to the closure of accounts of Iranian students and businesspeople.

"To resolve this issue, apart from negotiations held by CBI officials and other political figures, account holders had to present their data and credentials to be used for identification by Chinese banks," he said.

New UAE Strategy

Yaqoubi also referred to similar obstacles created for Iranians in Emirati banks for Iranian merchants, saying Iran is seeking other Persian Gulf alternatives to replace the UAE in its banking transactions.

"The political stance espoused by the UAE is in opposition to Iran and bilateral relations are currently at a low point," he said.

The CBI official said Iran's relations with Oman and Qatar are growing and considering the expansion of correspondent ties with these states, it is proposed that these countries replace the UAE as the main trade hub for Iran.

In a trend evident in recent months, media reports revealed in November that Emirates NBD, one of the largest banking groups in the Middle East in terms of assets, sent a letter to its Iranian customers to notify them that their accounts do not match the bank’s portfolio criteria and gave them a 30-day deadline to close their accounts.

Iran-China Trade Outlook

At the Third Conference on Iran-China Business and Investment Opportunities held at Iran Chamber of Commerce, Industries and Mines on Tuesday, Gholamhossein Shafei, the head of ICCIMA, alluded to the resolution of bank account closures of Iranians in China.

Shafei referred to China's Belt and Road Initiative and said the chambers of commerce of 67 countries are now members of the initiative, with ICCIMA acting as the deputy head of this initiative.

Mohammd Khazaei, the head of the Organization for Investment, Economic and Technical Assistance of Iran, also said at the meeting that Iran and China are strategic partners whose relations are ever expanding.

Khazaei noted that in 2017, trade between Iran and China grew by 22% and that Beijing meets 8% of its gas and oil needs from the energy-rich Middle Eastern country.

In another upbeat news regarding Iran-China relations, Asgaroladi announced that the People’s Bank of China, the central bank of the country, has given the green light to Iranian private sector investors interested in purchasing the shares of Chinese banks.