Iran's Finance Deals With China, Russia Intact

EghtesadOnline: Finance agreements Iran signed with China and Russia after the 2015 multilateral nuclear accord are still valid, despite the US reimposition of sanctions against Tehran, an official at the Organization for Investment, Economic and Technical Assistance of Iran said.

News ID: ۷۴۵۸۵۲

12 August 2018

Saeid Khani Oshani, the deputy for loans at OIETA, added that finance from Europe, South Korea and Japan has been suspended due to European banks' exposure to the US financial system.

Oshani noted that negotiations with the European Union are continuing in order to resolve the issue, but these could be prolonged, according to Financial Tribune.

"There are two aspects of Iran-Europe cooperation: One is that some banks say they will totally stay clear from Iran business and other banks and firms that are seeking a mechanism to work with Iran but that has not become operational yet," the official was quoted as saying by Fars News Agency.

"However, finance with China is still in place and we are negotiating to realize that finance."

On August 6, US President Donald Trump signed an executive order reimposing sanctions on Iran’s automotive industry, its trade in gold and its access to dollars, among other things. The move made good on the president’s promise to withdraw from the deal, signed in 2015, which gave Iran sanctions relief in exchange for curbs on its nuclear program.

In an effort to preserve the agreement, the European Union instructed firms from member states not to comply with the sanctions and allowed them to sue in court to recover damages resulting from the US action.

Oshani referred to the €1.2 billion Bandar Abbas Thermal Power Plant, saying the contractor and agent banks have been selected and down payment for the project has also been provided.

He added that the €1b project to electrify the Garmsar-Inche Borun Railroad, which was signed during a visit by Russian President Vladimir Putin to Tehran in November 2015, has also taken off with the selection of both Russian and Iranian contactors.

The railroad extends into Turkmenistan and Kazakhstan, linking Central Asia to the Persian Gulf and beyond.

China and Russia have rejected new US sanctions on Iran, pledging to maintain trade ties with Tehran after Trump warned countries against doing business with the Islamic Republic.

Beijing has close economic and diplomatic ties with Tehran. It is Iran’s biggest oil customer, taking in more than 650,000 barrels per day from the country.

Putin has said Russia is prepared to continue its oil investment in Iran at the level of $50 billion in the face of US plans to reimpose sanctions on the Iranian oil and gas sector on Nov. 4.

On Tuesday, Russia said it was “deeply disappointed by US steps to reimpose its national sanctions against Iran" as it pledged to do "everything necessary" to protect its shared economic interests with Tehran.