Six Powers Need to Publicly Notify Post-Sanctions Policy

The Central Bank of Iran has issued new guidelines clarifying domestic banks’ interaction with their foreign peers and businesses. The guidelines, published in the form of a directive Sunday, comes after the US Treasury Department’s recent move to help further ease restrictions on Iran's dollar transactions.  

The CBI is cognizant of the recent "alleviation of misgivings" about financial dealings with Iran and requires banks to compel international entities to meet their commitments vis-à-vis Iran.

“According to the terms of the nuclear agreement, which came into effect in January, the six powers – US, Britain, France, China, Russia plus Germany – are supposed to update (revise) their restrictive measures over interaction with Iran. They also are supposed to inform the public about the updates,” says the CBI, as reported on its website.

Iranian entities not on the sanctions list are allowed to open US dollar accounts in non-US banks across the world, says the regulator. “There is no risk in conducting banking operations for Iranians as long as transactions do not involve financial institutions in the United States.”

US sanctions on Iran are not applicable to non-US financial institutions and cannot be used as justification for refusing services to Iranians, the CBI affirms.

It also notes that working with Iranian entities would not jeopardize foreign banks’ relations with US financial institutions, as feared by many big lenders and insurance companies still hesitant to resume normal relations with post-sanctions Iran.

“According to the nuclear agreement, US-affiliated companies in other countries, are also allowed to restart financial ties with Iran,” the CBI added.

Banks are also informed that the non-US entities and individuals are allowed to engage in transactions with companies that are minority-owned or wholly controlled by Iranian entities.

The Office of Foreign Assets Control of the US Treasury Department had announced that it is not necessarily sanctionable for a non-US person to engage in transactions with an entity that is not on the SDN (specially designated nationals) List but that is minority owned, or that is controlled in whole or in part, by an Iranian or Iran-related person on the SDN List.

The SDN -- specially designated nationals -- list comprises certain Iranian companies and people who are still subject to US sanctions for a variety of reasons, including Iran’s ballistic missile program, human rights record and support for groups the US claims to be terrorist organizations.

The CBI also says domestic entities "have no right to use sanctions" as an excuse for not offering services inside the country.

The guidelines, issued by the US Treasury Department's Office of Foreign Assets Control on Friday, clarify that non-US banks can do dollar trades with Iran, provided those transactions don't pass through financial institutions in the United States.

The guidance comes after months of complaints from Tehran, which says that remaining US sanctions have frightened away trade partners and robbed Iran of the benefits it was promised under the nuclear deal it concluded with world powers last year.

Valiollah Seif, CBI governor, also complained about the current state of international banking relations, saying that it is not “satisfactory.”

“Many things have indeed improved after the lifting of the sanctions in January and we have managed to establish relatively good relations with foreign banks,” he said recently.

“But the current state simply cannot be seen as normal."