Economy, Business And Markets

Banks Reconnecting as Sanctions Fade

Banks Reconnecting as Sanctions FadeBanks Reconnecting as Sanctions Fade

Iranian lenders should be prepared to issue letters of credit as this week’s lifting of sanctions will put an end to limitations in the way, Majid Takht Ravanchi, deputy minister of foreign affairs said Sunday.

Addressing a meeting of bankers and business leaders at the Iran Chamber of Commerce on Sunday, Takht Ravanchi referred to the implementation of the nuclear accord with the six world powers this week and said all economic, trade, financial and banking sanctions will become a thing of the past, Mehr News Agency reported.

The senior nuclear negotiator took stock of the Article 19 of the nuclear deal officially known as the Joint Comprehensive Plan of Action that says, “From implementation day onwards any financial transaction between Iranian and European banks and their people are lawful.”

“It also vindicates correspondent banking relations, allowing foreign banks to open branches in Iran and providing insurance and reinsurance to Iran and reconnection to SWIFT interbank messaging system.”   He added that talks have been underway for SWIFT reconnection in order to accelerate the process so that the reconnection occurs as soon as the sanctions are lifted. On visits by foreign trade delegations to Tehran he said the nuclear accord paved the way for normal international trade with the comity of nations.

Abdol Rasul Dori Esfahani, the financial and banking representative in Iran’s nuclear delegation also said negotiations are underway with three international export credit insurers namely Hermes, COFACE and SACE. He stressed the importance of reconnecting to the global institutions saying they can help domestic banks and finance domestic projects.

The CBI has been striving for the past three months to restore correspondent banking relations with international banks and some have agreed to undertake measures establishing ties with Iranian banks, the official was quoted as saying.