Economy, Business And Markets

In Talks With May, Renzi in New York

Hasan Rouhani (R) and Italian Prime Minister Matteo RenziHasan Rouhani (R) and Italian Prime Minister Matteo Renzi
As part of the agreements enshrined in the JCPOA, Iran must be able to benefit from the positive economic landscape that has emerged

President Hassan Rouhani met with leaders from the UK, Italy and Turkey, and emphasized the need to expand banking cooperation.

“European leaders must guarantee that their banks and insurance firms will continue and promote ties with their Iranian counterparts,” the president said Tuesday on the fringes of 71st United Nations General Assembly in New York, reported.

“Our countries and companies must reap the benefits of the JCPOA,” he said referring to the historic nuclear deal signed between Iran and the six world powers last July.

In his meeting with British Prime Minister Theresa May, the president called the JCPOA a major development, a symbol to resolve issues and a foundation for future collaboration. “All sides of the deal must be fully committed to deliver on the pledges that were made as part of the nuclear deal,” he stressed.

“So far, Iran has been consistent in its commitments and so long as other parties remain committed so will we.”

He noted that as part of the agreements enshrined in the JCPOA, Iran must be able to benefit from the positive economic landscape that has emerged. “Until the technical issues regarding banking and insurance are not resolved, the commitments made by other parties will remain unfulfilled,” he noted.

Visibly concerned over the lack of commitment of western powers vis-à-vis the nuclear deal’s economic aspects, the president told May “European governments must reassure major international banks that they can cooperate with Iran and London could be the party taking a major step in this matter.”

Rouhani referred to the improvement in ties between Tehran and London in the past, and said with mutual respect and focus on collaboration in the framework of shared interests, “we can overcome historically negative perceptions.”

On Sunday a prominent British politician and the special envoy of UK prime minister for Iran said British banks are in talks with OFAC – the US agency that is charged with planning and execution of economic and trade sanctions – in order to facilitate the reestablishment of links with their Iranian counterparts.

“The issue has not been left stagnant and representatives of British and European banks are working hard to receive necessary guarantees relating to Iran from the US,” Norman Lamont said.

 May’s Stance

Stressing that the restrictions imposed by the US are also a problem for British banks as is the case for Iranian banks, the former chancellor of the exchequer said US Secretary of State John Kerry also believes that Europe must restore its banking ties with Iran.

The British prime minister welcomed expansion of political and economic relations with Iran and said her country fully backs further development of such ties. “London will continue with its support of the important step that was the JCPOA and is of the belief that all sides must stay committed to its principles,” May said.

To clear banking and insurance hurdles and to make sure Iran is able to benefit from the newly-opened windows of economic opportunities, May said  negotiations are making headway. She also announced that a UK banking delegation will soon come to Iran in order to negotiate and work out technical details.

 Italian Clout

In talks with the Italian Prime Minister Matteo Renzi, the president said in the post-sanctions era, Italy has the opportunity to once again become Iran’s first and foremost economic and trade partner in Europe.

“The recent bilateral visits have been a high point in joint efforts and show the will of two nations and governments to expand and reinforce the level of collaboration,” he said.

Emphasizing the necessity of expanding joint cooperation in economic, political and scientific fields, Rouhani noted that an important role can and will be played by the private sectors in both countries.

The Italian prime minister said his government is looking forward to strengthening relations with Tehran. “We are ready to do whatever we can in order to consolidate our economic ties.”

Renzi announced that an Italian delegation will visit Tehran in the coming months. “On the matter of banking relations, SACE insurance is ready to provide the necessary guarantees,” he was quoted as saying.

SACE, the Italian export credit agency, announced in July that since the lifting of sanctions in January, its cover for trading with Iran has reached €2.5 billion. the total value of SACE coverage for Iran used to be €4.5 billion which fell to €1 billion after the international sanctions were tightened in 2012.

It is vital for Italy to reassure investors that they can work with Iran, Renzi said, reassuring that Italy will continue to deliver on its commitments as part of the JCPOA and “we will do anything in our power to strengthen it.”  

Nine months after the sanctions deal took effect, foreign banks are reluctant to get involved with Iran because of concerns that they could be caught up in restrictions applying to US banks still banned from doing business in and with Iran.