The Central Bank of Iran held a press meeting Monday to officially announce that it has reconnected to Swift, the interbank messaging system. The move comes after sections of the conservative bloc and their media outlets openly cast doubts over Iran’s relink to the global network by some conservative media.
Hussein Yaqoubi, director of CBI’s international affairs, said that 29 Iranian banks are now relinked to the global network and that lenders have established corresponding relations with about 300 banks across continents.
“We had corresponding relations even during the sanctions, but it was very restricted and costly,” Yaqoubi was quoted as saying by ILNA.
The CBI, Iranian banks, their overseas branches and affiliates were officially removed from Swift’s sanctions list on January 17 after Iran’s nuclear accord with the six world powers came into effect. This has allowed banks to resume cross-border transactions with foreign banks after the lifting of sanctions on Tehran, a Swift official said.
Iran’s reentry into the Swift system four years after banks were cut off from the network, had become a political issue in Tehran in recent weeks.
Conservative lawmakers and political opponents of President Hassan Rouhani had claimed that the reconnection was not fast enough and the historic nuclear deal was not delivering the much-publicized economic benefits. Some hardline opponents even said the Swift relink the CBI had often talked about was “simply not true.”
New Decree
Yaqoubi added that Iran has links with major European banks. “A new decree has been issued barring us from getting linked to minor banks overseas.” He did not provide details about the decree nor say why it had been issued and by whom.
“We have links to banks in Italy and Austria,” he said, “An account is opened for the CBI at the Central Bank of Italy and we have made transactions through the account.”
A survey by the Financial Times disclosed on Sunday said Belgium’s KBC, Germany’s DZ Bank and Austria’s Erste Bank have all started handling transactions on behalf of European clients doing business in Iran.
However, bigger European banks remain on the sidelines alongside their US rivals, scarred by a string of multibillion-dollar fines for earlier sanctions breaches in Iran.
The CBI is also working to remove the remaining sanctions against three Iranian banks, the official said.” Some banks will remain sanctioned for reasons unrelated to the nuclear issue. The three lenders are Bank Saderat, Ansar Bank and Mehr Eqtesad Bank.”
Yaqoubi confirmed that no transaction is dollar is recorded so far, though “There is no problem for transacting in euro and the Turkish Lira.”
“As an example, Turkey’s Halk Bank has been transferring both euros and liras for Iran.”
Bank Melli Iran
Reporters were briefed on the process of sending Swift messages in Bank Melli Iran.
Gholam Reza Panahi, a member of BMI’s board of directors, said that his bank had sent and received more than 3,800 interbank messages since February 15, ISNA reported.
“We have received a payment order directly from Japan’s largest bank as well as direct guarantees from banks in Switzerland,” Panahi added.
Bank Melli Iran is ready to transfer money for customers both in the the country, and overseas.
Remaining Issues
The deputy foreign minister for legal and international affairs has announced the complete lifting of sanctions against the Central Bank of Iran.
“In recent months we had successful financial interaction as the international restrictions on CBI accounts were lifted effectively and Iranian banks are now officially reconnected to the Swift,” Abbas Araghchi told state TV in a live prime time interview late Sunday.
On the foreign assets now in the process of being released, he said “some of the assets belong to the government and the rest to the CBI.” No figures were announced.
However, he noted that the complete release of the frozen assets was being meticulously pursued in negotiations between Iran and the six world powers (the five permanent members of the UN Security Council plus Germany).
“Almost all the assets have been released, but we still have difficulty in bank transfers due to the problems created by the United States.” Reports say Tehran has received an estimated $130 billion in frozen assets.
Although most of the international sanctions are now history, some restrictions, including transactions in the US currency, are still in the sanctions list.
“The reason that (US) restrictions on dollar transactions have not been lifted yet is that it is not included in the nuclear-related sanctions. If we want to have transactions in US dollars, we should start bilateral negotiations with the US, which is not in the interest of our country,” the senior Foreign Ministry official said.
On the negotiations between CBI officials and foreign banks over the banking transactions issue, he said, “Most international banks operate through America’s financial system, which is based on US dollars. During the sanctions years, many international banks were fined by US government for cooperating with Iranian lenders and were coerced into signing agreements on cutting relations with Iranian banks.”
The Leader Ayatollah Seyyed Ali Khamenei in his Norouz address on March 20 said the fear of US regulations was keeping big foreign companies, particularly in the financial sector, away from Iran.
“The U.S. Treasury ... acts in such a way that big corporations, big institutions and big banks do not dare to come and deal with Iran,” the Leader said. The CBI has confirmed that the remaining US sanctions have scared off European firms wanting to do business in and with Tehran.
Meanwhile the Obama administration has announced that it considering a general license permitting offshore financial institutions to access dollars for foreign currency trade in support of business with Iran, a practice that is currently illegal.
