As the first Irish trade delegation arrived in Iran this week after the lifting of sanctions in January, a major obstacle in the way of bilateral trade between the two countries has remained unresolved.
Like many European banks whose fear of US penalties have held them back from reengaging with the Middle East’ second largest economy, Irish banks are yet to embrace lucrative business with the Islamic Republic.
Ireland’s two main banks still refuse to facilitate financial transactions with Iran despite the lifting of EU and UN sanctions more than three months ago.
According to Irish Times, AIB and Bank of Ireland have confirmed that their restrictions on processing Iranian money remain in place. The restrictions could see Ireland lose ground to European rivals in the race to secure trade with Iran.
A host of Irish food companies took part in the historic trade mission to Iran. Organized by Bord Bia, –a government agency–the Irish delegation explored uncharted waters for Irish food.
Bank of Ireland said that while certain sanction restrictions in relation to Iran had been lifted, ongoing requirements and regulations remain, including the continued application of US primary sanctions.
Under Review
“For these reasons, Bank of Ireland is not in a position to process Iranian-related transactions,” it said.
AIB said it has restrictions on financial transactions involving Iran but would keep the issue under review.
With 80 million people, for years cut off from trade, Iran is seen as one of the great untapped markets of the world.
In recent weeks the country has signed major trade deals with France, Italy and South Africa and will host trade delegations from Germany and Russia in the coming months.
With the beef market sown up by Brazil, Iran’s fast-growing appetite for dairy, particularly milk powders, butter and cheese, is seen as the best potential source of exports for Ireland.
Ireland’s food and beverage exports to Iran, which were not covered by sanctions, amounted to €3.6 million last year. They consisted mainly of fizzy drink concentrate, butter and prepared foods.
Demand For Premium Food
“The lifting of international sanctions on Iran opens the way for Irish food exporters to explore trading opportunities in the second largest economy in the Middle East,” said Bord Bia chief executive Aidan Cotter.
“As the economy grows and demand for premium food products outstrips domestic supply, Iran is looking to countries like Ireland to supply high quality, safe and sustainably produced food,” he said.
Next month Enterprise Ireland will front another trade mission to Iran. The focus will be on possible tie-ups in healthcare, technology and financial services.
Irish Exporters Association CEO Simon McKeever had criticized the government in February for its slow response to the lifting of Iran sanctions.
