Closure of Iranian Bank Accounts in China Denied

EghtesadOnline: Iran-China Chamber of Commerce has denied reports of Iranian traders’ bank accounts being closed by Chinese lenders as part of new restrictions imposed on the country by Beijing–an important economic ally of the Middle Eastern country.

News ID: ۷۷۸۴۰۶

15 August 2017

“Bank account closures in China have nothing to do with the latest US sanctions against Iran, as they have been imposed on certain entities and individuals, and are completely unrelated,” a senior official with the chamber told Financial Tribune on the condition of anonymity.

In recent days, a number of media outlets published reports that Iranian traders are facing en masse account closures, prompting a late night TV show to conduct interviews with several Iranian citizens in China who claimed their accounts with three lenders, namely Agricultural Bank of China, Industrial and Commercial Bank of China and China Merchants Bank, have been closed.

“I have two bank accounts in China, one of which has been closed without giving any reasons,” one distraught caller said, while another claimed that three of his accounts have been closed and his subsequent trips to China led him nowhere, Financial Tribune reported.

However, as the source tells Financial Tribune, the closures are mainly due to the regulations of the global standard-setting Financial Action Task Force that deals with combating money laundering.

The closed accounts reportedly belonged to private citizens who are on non-business visits to China, but engage in unlicensed business activities.

“Considering the FATF recommendations and the fact that Iran still remains on the list of high-risk countries, it is only natural that the Chinese lenders would close the accounts of people without official business accounts and of those who transfer massive amounts of money in their accounts without paying  taxes,” the source adds.

CBI Delegation to Tackle Problems

Economy Minister Ali Tayyebnia has also denied the account closures, announcing that a central bank delegation will visit the East Asian nation.

“Bank accounts of traders and businessmen have not been blocked in China, but a system has been established in the country to regulate foreign trade ties between their banking, customs and currency systems, and that has led to changes in Iran-China business relations,” Tayyebnia was also quoted as saying by Mehr News Agency.

“In the past few days, we had engaged in extensive negotiations with Chinese banking officials to remove any hurdles and it has been agreed that a delegation from CBI will travel to China to solve the problem,” he added.

Tayyebnia also referred to problems faced by Iranian petrochemical exporters who could not transfer their gains and said he engaged in negotiations with top Chinese banking and economic officials in his recent trip to the country, adding that in the wake of his recent talks with a top Chinese official in Tehran, improvements are expected.

“What is certain is that the Chinese government sees eye to eye with us that problems facing trade ties between the two countries must be resolved,” he said.

Earlier this week, Tayyebnia met with Chairman of the Chinese National Development and Reform Commission He Lifeng in Tehran to discuss various dimensions f Iran-China economic ties, especially those concerning banking ties.

“We talked about ties between our banks and the Chinese official promised to follow up on the matter so that banking ties between Iranian and Chinese lenders would soon be reestablished,” he said after the meeting.

According to the source at Iran-China chamber, not all Iranian exporters of petrochemical products have faced difficulties in clearing their profits.

“Ones that have hit barriers are those who have switched their bills of lading and reroute their shipments via other places such as Oman and Dubai,” the source added.

In his latest remarks, Tayyebnia also stressed that establishment of correspondent banking relations is a prerequisite for smooth trade between Iran and China, and for Iranian exporters to be able to collect their profits.

“That is while Iran experienced many difficulties in this regard at the height of sanctions and now it expects normalized trade through proper banking channels,” he added.

According to Tayyebnia, several Chinese officials have promised to rectify the problems and in addition to the CBI delegation travelling to China, “it has been arranged for a Chinese delegation to travel to Iran in the foreseeable future to remove the limitations”.