No Banking Hurdles for Iran Air ATR Accords

EghtesadOnline: Banking hurdles have not hindered the agreements for the sale of new ATR aircraft to Iran, the chief financial officer of the French-Italian planemaker said.

News ID: ۷۷۶۵۱۳

27 May 2017

“What is being said about banking restrictions is public information and is reported by newspapers. Banking sanctions have not caused any problems in these deals,” Giovanni Tramparulo also told ILNA.

Admitting that a number of western banks have refused to work with their Iranian counterparts, the official noted that negotiations have been held with banks in Italy and France, and they have announced their readiness to work with Iran on money transfers related to the aircraft deal.

“A number of European banks are willing to be present in dealings with Iran,” Financial Tribune quoted him as saying.

On May 17, Tehran’s Mehrabad International Airport saw the touchdown of four new ATR 72-600 planes that joined the Iranian aircraft fleet. The new planes are the first batch of a big order the country’s flag carrier Iran Air placed mid-April with ATR to purchase 20 turboprop regional aircraft, with the option of adding 20 more in the future. ATR is financing the first few deliveries itself.

Noting that the sanctions are not the main focus when it comes to financial transactions regarding the deal, Tramparulo said that in the ATR deal, “the important thing was for us to be able to find banks that would be willing to work with Iran’s Bank of Industry and Mine, which happened”.

The senior finance deputy with ATR emphasized that banking sanctions have not proven to be an obstacle in this deal, as the banks had problems with the costs entailed in evaluating and verifying Iranian banks.

There is no additional cost for banks when it comes to receiving the actual money. However, when a bank has to verify its Iranian counterpart, it entails costs for the bank.

“Therefore, the banks have to bear costs that will not bring any profits for them,” Tramparulo said, referring to this factor as the reason for European banks’ reluctance in working with their Iranian peers.

“But even under these circumstances, we were able to find banks that were willing to work with Iranian banks and receive money from Iran as a source,” he said.

Other Deals

Iran has also received three new aircraft from Airbus as part of a contract with the European planemaker for the purchase of 100 passenger jets.

Another deal with American giant Boeing, also signed after the nuclear deal, will see the delivery of 80 planes in the future.

Since the removal of international banking restrictions in January last year, Tehran has secured links with only a limited number of banks as US sanctions remain in force and large foreign institutions still fear potential fines.

Banks remain nervous after US penalties, including a $9 billion (£7.32 billion) fine on France’s BNP Paribas in 2014, were levied for violating financial sanctions imposed in 2012 on Iran’s nuclear program.

Major global lenders like HSBC have reiterated that they have no intention of doing any new business involving Iran, questioning why the United States encouraged them (mainly during Barack Obama’s presidency) to do so when American financial firms are restricted.