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Banking relations with foreign countries have not fully normalized yet.
Banking relations with foreign countries have not fully normalized yet.

Ministry to Help Ease Concerns of Foreign Banks

Iran is working to dispel irrational fears about engagement with its banking system, which have withheld major foreign banks from doing business with Iran

Ministry to Help Ease Concerns of Foreign Banks

Iran is working to dispel irrational fears about engagement with its banking system, which have withheld major foreign banks from doing business with Iran.  Director of Foreign Ministry's Office for Economic Coordination and Planning Fereydoun Haqbin made the announcement on Tuesday, saying the move is intended to boost commercial relations with various countries.  

“Some banks refrain from working with Iran because of political reasons. Some other banks, however, are still afraid of working with Iran, mainly due to the lack of familiarity [with Iranian banking system] or poor connections,” IRNA quoted him as saying on Wednesday.

Iranian lenders have managed to establish links with foreign banks and transfer money from overseas accounts, according to Haqbin, “but it is not enough”.

“Banking relations with foreign countries are not fully normalized yet, even after sanctions removal in January,” he said.

Iran also plans to use other currencies rather than the US dollar for trading with other countries, according to the diplomat.

“The use of local currencies was among issues addressed in recent agreements between the Central Bank of Iran and Latin American banks, in line with the policy of boosting trade between countries,” he said.

“We are not allowed and do not want to use US dollar for doing trade with the world. There are other [credible] currencies used across the world, which can help us revive our commercial relations.”

Foreign Minister Mohammad Javad Zarif made a six-day tour of Latin America late August, visiting Ecuador, Cuba, Chile, Nicaragua, Bolivia and Venezuela. Enhancing banking relations was among issues discussed during his meetings with Latin American officials.

Haqbin also noted that the Central Bank of Cuba is ready to repay its debts to Export Development Bank of Iran.

“Officials from CBI, EDBI and Export Guarantee Fund of Iran had constructive talks during recent meetings with Cuban officials,” he said.

Comfort Letters

Haqbin also said the issuance of comfort letters for addressing foreign banks’ concerns over working with Iran should be among the US commitments.

“I personally believe that seeking the issuance of comfort letters is Iran’s right, which we should not ignore,” he said.

Zarif last week announced Iran will pressure the US Treasury Department to issue comfort letters to reassure international banks and firms wary of US sanctions about engaging in transactions with their Iranian counterparts.

Iranian business leaders believe the US has failed to spell out exactly what is permitted and what is not, maintaining uncertainty and putting off international banks from processing Iran-linked transactions.

The US administration denies it has done little to address the issue, claiming it has gone to great lengths to clear up misunderstandings among banks and businesses. However, bankers and investors argue there is still little clarity on what trade could be done.

 

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