Iranian Bank Account Closures in 3 Countries Dampen Trade Prospects

Iranian bank accounts in a handful of regional countries are being closed en masse due to reasons ranging from strained ties with Persian Gulf Arab states to Turkish foreign exchange policies, sources familiar with the matter said.  

Media reports show bank accounts belonging to Iranian citizens either face closures or limits in the UAE, Turkey and Oman.

A source in Iran-Emirate Chamber of Commerce told Financial Tribune on condition of anonymity that Emirati banks have blocked the accounts of about 400 Iranian companies in the past few weeks and banks refuse to open accounts even for dual nationals.

However, the source confirmed that the limits have not been officially mandated by the governments of these countries, but rather are moves initiated by the lenders themselves.

US companies are among major shareholders in Emirati banks who are legally barred from doing direct business with Iran, the source said, adding that bilateral banking ties have suffered more after US President Donald Trump's recent visit to Saudi Arabia where he called for setting up a regional alliance against Iran.  

Banking restrictions continue to be the major hurdle for Iran's economy to attract the much needed foreign investment, despite the 2015 nuclear deal that promised to lift the embargo against Iran.

An Emirate-based businessman told Financial Tribune that the UAE RAK Bank (National Bank of Ras Al-Khaimah public joint stock company), which used to have good relations with Iranian traders, has started to block Iranian accounts in past weeks.

Iranian business owners in the Emirates believe that it is not all about the nuclear accord and sanctions.

Reportedly, things started to go south after the 2016 attack on the Saudi Arabian Embassy in Tehran by protesters enraged by the Saudi execution of prominent cleric Sheikh Nimr al-Nimr without due process. The incident resulted in a break in diplomatic relations between the two regional rivals.

Director General of the International Affairs Department of the Central Bank of Iran Hussein Yaqoubi on Tuesday also did not deny the fact that Arab countries are sabotaging Iranian traders' payment orders.

Turkey, Oman

A number of Turkish banks are also reportedly freezing the accounts of Iranians, especially traders who transfer big sums of currency out of the country.

Secretary-General of Iran-Turkey Commercial Council Jalal Ebrahimi told Financial Tribune that only a few Turkish banks are closing Iranian accounts while it is not a state directive.

"The account blockages only pertain to foreign exchange accounts that mostly concern major traders who move a considerable amount of currency out of Turkey," he added.

Ebrahimi also noted that the accounts of Iranian traders, who also hold Turkish citizenship, were not blocked.

Referring to the Turkish government's policy of preventing the outflow of foreign currency, Ebrahimi said policies advocated by President Recep Tayyib Erdogan are probably a reason for the the account closures.

However, Ebrahimi said economic relations between the two countries have expanded after the lifting of nuclear sanctions and both countries' officials are endeavoring to ease mutual trade.

There are also reports on the closure of Iranian bank accounts in Oman. When contacted, officials in Iran-Oman Chamber of Commerce, neither confirmed, nor denied them but said they would soon come up with an official statement.