Economy, Business And Markets

Forum Speaker: US Banks Given Unfair Advantage

Forum Speaker: US Banks Given Unfair Advantage
Forum Speaker: US Banks Given Unfair Advantage

In its first ever Iran European Forum on investment opportunities in Iran, speakers at the event have been making strikingly different assumptions about the ease of investing in the country.

In one of the keynote speeches, Barthelemy Helg of the ACL group, who is one of the main sponsors of the event, highlighted the issue European businesses face when entering the Iran market, Financial Tribune has learnt.

Helg said US financial institutions and banks have “an unfair advantage” over their European Union counterparts in getting legal clarity of Iran, Financial Tribune correspondent at the event said.

An interim deal with Iran won’t be enough. Banks need more clarity around rules and consequences, he said.

Helg’s statement on the first day of the two day event (Wednesday) highlights the difficulties involved in European companies dealing with third party regulations placed upon them from outside, in this case, United States institutions in the guise of the OFAC regulations. Whereas their American counterparts are able to receive recognition from the US authorities to deal with Iranian banks, thus giving them a head start if sanctions are to be further relaxed.

Helg went on to say that the US has consistently used sanctions as a way to stave off the competition from other countries only benefitting their own enterprises. He added that an interim deal with Iran wouldn’t be enough for the business community in the short to medium term, with banks across the world needing far more clarity for the issue of dealing with Iranian banks.

He also stated that Switzerland, and the Swiss banking system as a financial body was in a very unique position to have banking relations with Iran, but insisted that financial institutions in Geneva face fines of huge proportions if they run afoul of the current sanctions framework.

Other speakers on Wednesday highlighted the opportunities Iran offers if sanctions are further relaxed, though keeping a mindful eye on the events currently going on in the political arena with regards to the nuclear negotiations.

The US and EU intensified sanctions against Iran back in 2010 over the country’s nuclear energy program. The two also imposed new sanctions in 2012 banning financial transactions with Iranian banks. Although part of the sanctions have been relieved since last year following an interim deal between Tehran and the six world powers including the US, European business companies are still awaiting a total lift of sanctions that could be achievable by a November 24 deadline set for a permanent deal.