An official with the Iran-China Chamber of Commerce and Industries denied reports that China's Bank of Kunlun has severed ties with its Iranian customers. Majid Reza Hariri said Bank of Kunlun has not denied service to Iranians but rather, has notified commercial account holders that if they have an open letter of credit or unfinished payments, they should complete them by November 1.
The new round of US sanctions aims to exert economic pressure on Iran, after President Donald Trump abandoned a 2015 deal between Iran and six world powers aimed at curbing Tehran’s nuclear program.
China has said it is opposed to any unilateral sanctions and has defended its commercial ties with Tehran.
Hariri added that Bank of Kunlun does not guarantee that Iran payments can be processed after Oct. 1, before the US sanctions formally begin.
"Just like we are waiting for Europe to offer its new package for [working] with Iran, the Chinese are also slated to offer a package and thus Kunlun has notified its customers to complete their unfinished business should any change occur after that," Hariri was quoted as saying by IBENA new website.
Confirming IBENA's comments, Hariri told the Financial Tribune that Kunlun is itself under US sanctions and faces problems in its transactions with other Chinese banks as well.
"It's been a month that Bank of Kunlun has stopped its euro transaction [for Iran] which is due to both sanctions and China's own fiscal and monetary policies to expand yuan transactions," he told the Financial Tribune.
Reuters reported on Tuesday that Bank of Kunlun Co, the key Chinese conduit for transactions with Iran, is set to halt handling payments from the Islamic Republic under pressure of imminent US sanctions against the country.
Iran’s commercial exchanges with its biggest trading partner amounted to $19.66 billion during the first half of 2018 registering an increase of 2.2% compared with last year’s corresponding period, according to a statement by the Chinese Ambassador to Iran Pang Sen.
