Iran, Italy Maintain Banking Ties Despite Sanctions

EghtesadOnline: Albeit facing many barriers at a low level, banking ties between Iran and Italy have not been fully severed despite the fact that the first round of US sanctions has snapped back, the president of Iran-Italy Chamber of Commerce said.

News ID: ۷۸۳۷۷۷

26 August 2018

“Since the Italian economy comprises small- and medium-sized enterprises, they have less concerns over international engagements for establishing ties with Iran,” Ahmad Pourfallah also told IBENA.

According to the official, since Iran faces monetary issues on the international scene, financial activity with Italy are currently handled mainly through exchange bureaux and a number of third-tier Italian banks.

One of Iran’s main problems is that many established banks refuse to conduct transactions related to Iran through SWIFT (the Society for Worldwide Interbank Financial Telecommunications), the international messaging network that financial institutions use to securely transmit information and instructions through a standardized system of codes. This is while Iran’s access to the network has not been cut yet, Financial Tribune reported.

Denied access during the previous round of nuclear-related sanctions, Iran was virtually isolated financially.

The US is once more trying to cut off Iran’s access to SWIFT and hamper the country’s financial ties since May when US President Donald Trump unilaterally pulled out of Iran’s nuclear deal with world powers.

The latest attempt came on Thursday when a group of 16 GOP senators led by Ted Cruz of Texas urged Treasury Secretary Stephen Mnuchin on Thursday to take “all necessary steps” to disconnect Iran from the SWIFT network.

“Quick robust enforcement will be critical for the administration’s maximum pressure strategy to succeed,” they wrote.

“The administration’s maximum pressure campaign will not succeed if the Islamic Republic remains connected to SWIFT.”

As Pourfallah said on Thursday, Iran must work hard to be able to conduct its financial transactions through the banking system, especially since Italy is a major trade ally. He pointed out that continued dealings through non-credible banks and exchanges will entail the risk of losing assets and resources.

“The decision made by the chamber of commerce is to provide for the needs of [Iranian] companies through SMEs whose dealings are not with the US dollar,” the official said.

In late June, Iran’s Foreign Minister Mohammad Javad Zarif addressed business community representatives at the Iran Chamber of Commerce, Industries, Mines and Agriculture to assure them that the future of Iran’s nuclear deal will be safe and trade will continue since European partners will introduce 5,000 SMEs for participating in joint ventures with domestic companies.