Economy, Business And Markets

British Banks Set for US Meeting on Iran

British Banks Set for  US Meeting on Iran  British Banks Set for  US Meeting on Iran

The British Bankers’ Association (BBA) has circulated a note to members asking them to send senior representatives to a meeting with US Secretary of State John Kerry later this week.

The meeting, to be held in London, is also expected to include executives from French and German banks, the website City A.M. reported.

Sky News first reported that the meeting, coming at a time when banks are interested in doing more business with Iran but concerned about the consequences of deals and the reaction of the US, was proposed by UK Foreign Secretary Philip Hammond.

Economic sanctions were lifted in January this year, following an agreement between Iran and the six world powers (the US, UK, France, China and Russia plus Germany) to limit Tehran’s nuclear activities.

Soon after the IAEA, the international nuclear watchdog, said Iran had fulfilled the terms of the agreement with big powers, European firms trumpeted deals potentially worth billions. Airbus said it would sell Iran 118 jets, with bigger orders possibly to follow. PSA Peugeot Citroën and Renault-Nissan said they would assemble and sell cars to Iran’s 80 million market.

But America continues to deny firms that operate in Iran access to its financial system. That spooks foreign banks, which are wary of the long arm of American law. Since 2009 the Treasury’s sanctions enforcer, the Office of Foreign Assets Control (OFAC), has imposed $14 billion in fines on those dealing with Iran.

Without the banks, those headline-grabbing deals will struggle to go far. Uncertainty lingers and according to an analysis by the Economist, the US Treasury seems unable to define the benchmarks Iran has to meet to regain access to the American financial system.

 Active Engagement

John Kerry, who is in the UK for an anti-corruption summit, has previously stated that the US is not opposed to foreign banks doing business with Tehran.

Before a meeting with Iran’s foreign minister, Mohammad Javad Zarif, last month, he said: “The United States is not standing in the way, and will not stand in the way, of business that is permitted in Iran since the [nuclear deal] took effect.”

He added: “There are now opportunities for foreign banks to do business with Iran... Unfortunately there seems to be some confusion among some foreign banks and we want to try and clarify that.”

It was reported earlier this month that Britain’s biggest banks are forming a high-level panel to navigate the removal of western sanctions against Iran.

Sky News reported the BBA has agreed to form a working group to examine the implications of the sanctions move.

UK-based exporters have complained that they have already slipped behind their competitors from France, Germany and Italy because of a lack of support from the British Embassy in Tehran, which reopened last year, having been closed since 2011.

Al-Monitor on Monday quoted a business source participating at a May 3-4 business conference in Zurich on condition of anonymity that two Swiss banks — Credit Suisse and UBS — were among several banks approached by officials from the US Department of State and the US Treasury to be reassured about the Iran business.  However, the two banks have announced that they abstain from conducting business with or involving Iran for the time being.