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Germany Establishes Banking Committee With Iran

Germany Establishes Banking Committee With IranGermany Establishes Banking Committee With Iran

The German and Iranian governments have decided to establish a joint banking committee in a meeting between visiting German Vice Chancellor and Economy Minister Sigmar Gabriel and Iran’s Central Bank Governor Valiollah Seif.

The two sides have discussed expanding banking cooperation vital to Tehran’s reconnection with the global financial community from which it was shut out for years under US and European sanctions.

Seif said officials from Berlin and Tehran would come together in September for the first meeting of the joint banking committee, according to Mehr News Agency.

“The reentrance of Iranian banks into the German market might cause some problems. The joint committee will solve these problems quickly,” Seif said.

Iran and the five permanent members of the UN Security Council together with Germany came to a final, comprehensive agreement on July 14, ending more than a decade of dispute over the scale of Tehran’s nuclear energy activities. Additionally, the UN Security Council unanimously accepted the draft resolution, which approves the nuclear deal and stipulates the UN sanctions on Iran will be gradually lifted.

A major achievement of last week’s finalization of nuclear talks for Iran was its restored access to the global financial transfer system called SWIFT. The sanctions were aggravated in 2012, and Iran was excluded from the Society for Worldwide Interbank Financial Telecommunications, which is based in Belgium and mediates international banking transactions.

While the council’s Monday endorsement of the deal virtually marked Iran’s reintegration into the financial society, the country is still likely to face unwarranted hurdles in its cross-border transactions.

Gabriel became the first western politician to visit Iran at the head of a delegation of business leaders a week after the agreement by attending the Iran-Germany Economic Cooperation Conference held in Tehran.

The governor said the first joint meeting will be attended by representatives of Melli, Mellat, Mine and Industry, and Iran-Europe banks.

Before the sanctions, Iranian lenders Sepah, Melli and Saderat processed transactions between the two countries in cooperation with Germany’s Deutsche Bank and Commerzbank.

Seif described Germany as Iran’s “most reliable trade partner,” saying Tehran seeks to restore economic relations with Berlin to the level before the sanctions, the report said.

Gabriel said he had brought the best German companies that enjoyed very good relations with Iran for years and tried to maintain those ties even under the sanctions regime.

“We are interested in restoring banking relations with Iran as soon as possible after the removal of the sanctions,” said the German vice chancellor.  Gabriel also stressed the need for reviving Iran-Germany Economic Commission.  

As many as 15 Iranian banks were barred from using SWIFT in an unprecedented political move under the US pressure in 2012, which eliminated trade worth about $35 billion with Europe.

The lifting of sanctions will also enable Iran to repatriate as much as $100 billion in frozen assets.