Iranian Banking Sector Awaits Full JCPOA Benefits

EghtesadOnline: Iran’s Deputy Foreign Minister Abbas Araqchi addressed various aspects of benefits resulting from the country’s nuclear deal with world powers.

News ID: ۷۴۵۱۰۷

18 March 2018

While conceding that Iran has yet to reap many of its deserved benefits, particularly those related to banking affairs, Araqchi said the nation is not at an impasse.

“The truth is that when the US saw that it cannot terminate JCPOA, it created conditions so that other countries may hold back from working with Iran for fear of being slapped with US penalties and because of this psychological atmosphere, many companies and banks do not work with Iran and that is a fact,” he said, referring to the nuclear deal by its formal name.

“We are still not back to the normal circumstances that prevailed before the sanctions concerning banking affairs, which has several reasons,” he also told Mehr News website in an extended interview published on Saturday.

In outlining those reasons, according to Financial Tribune, he referred to the atmosphere created by the US and then pointed to restrictions put in place by the Financial Action Task Force, the global standard-setter for anti-money laundering and combating the financing of terrorism.

The intergovernmental organization in late February recognized measures taken by Iran to address its deficiencies and decided to renew the suspension of countermeasures until its next meeting.

Till then, it has directed Iran to see to the finish line a number of items remaining incomplete on its action plan, including amendments to the current AML/CFT laws and another bill concerning Iran’s accession to the International Convention for the Suppression of the Financing of Terrorism.

Araqchi enumerated primary US sanctions put in place decades ago, “which have nothing to do with JCPOA” and “a number of problems that relate back to our own banks” as other reasons behind still-lackluster banking ties with foreign peers.

As they were cut off from the international banking system for years before the JCPOA was implemented in January 2016, Iranian banks and credit institutions are currently facing a slew of major issues, including outdated standards, faulty balance sheets, high volumes of non-performing loans and considerable credit crunches.

The deputy foreign minister elaborated that Iran has found many openings after the sanctions were lifted, conducted many financial transactions and is engaged in many more, established hundreds of correspondent banking relations with foreign peers and all Iranian bank branches on foreign soil are currently active.

“Specifically, our oil is being sold and its money is paid,” he added.

Araqchi noted that the last point is notably important, because the prospect of oil revenues dropping down to zero once more as a result of a potential collapse of JCPOA does not bode well with anyone, especially since Iran is currently challenged by many economic problems.

“We received many benefits from JCPOA, but we did not receive the full benefits. Just as we are completely committed to JCPOA, we also expect to receive its benefits in the full,” he said.