Businesses to Meet Zarif Over Chinese Banking Restrictions

As the banking woes of Iranians in China now include restrictions on companies, the head of Tehran Chamber of Commerce, Industries, Mines and Agriculture has announced an upcoming visit between private sector figures and Foreign Minister Mohammad Javad Zarif to discuss the issue.

Masoud Khansari added that the joint meeting between the representatives of private sector and Zarif will be held next week to further investigate the matter and find ways of resolving it, Mehr News website reported.

According to various official sources, the new restrictions are aimed at tightening the previous anti-money laundering rules that led to the closure of Iranian nationals' bank accounts.

Chinese financial institutions are apparently adhering more strictly to anti-money laundering and combating the financing of terrorism regulations set by the intergovernmental Financial Action Task Force, following renewed pressure from the US government.

"Chinese banks refer to the implementation of regulations related to AML/CFT as the main reason for closing the accounts of Iranian companies and traders, and the matter is currently being followed up," the TCCIM chief said.

Khansari added that Iran must have a "more active diplomacy" in its relations with China, including where the much-touted Belt and Road initiative is concerned.

Iranian nationals, namely traders and students in China, have faced a great deal of banking troubles with a number of lenders, including the Agricultural Bank of China, Industrial and Commercial Bank of China and China Merchants Bank. At each juncture, even as a number of Iranian officials (e.g. Central Bank of Iran Governor Valiollah Seif) made trips to the East Asian nation to resolve the issues, they maintained that an intensification of FATF regulations is the main reason behind the account closures and is not limited to Iranians.

FATF's active countermeasures against Iran have been suspended for more than a year and a half now, but until the Jan. 31 deadline that has been set for the country to fulfill its commitments and the verdict that will come shortly after, the organization has urged all its members to advise their financial institutions to apply "enhanced due diligence" to business ties and transactions with natural and legal persons from Iran.

Broad Restrictions

Pedram Soltani, the deputy head of Iran Chamber of Commerce, Industries, Mines and Agriculture, was one of the first officials publicly speaking about the latest wave of banking hurdles for Iranian companies in China.

"Even companies that were registered in China about 10 to 15 years ago have been subject to this new approach of Chinese banks. Iranian traders have resorted to their Chinese staff and are establishing new companies in their names and are entrusting their assets to them," he wrote in his channel in the popular instant messaging app Telegram.

According to Soltani, the Chinese government refrains from issuing foreign investment permits in Iran and Chinese clients are increasingly turning away from working with Iran, as making payments is extremely difficult and only possible through third-party countries.

Two other senior private sector figures have also confirmed that FATF concerns are at the root of the banking troubles of Iranians in China.

Majidreza Hariri, the deputy head of Iran-China Chamber of Commerce, has pointed out that three Chinese institutions have recently signed foreign finance deals with Iran, but added that the problems have  persisted.

"There were even cases where Iranian travelers in China approached the banks to exchange their money into yuan and the banks refused to do so," he said.

The Iranian Embassy in China has said a directive from Chinese authorities is due to be sent to all Chinese banks urging them to drop the restrictions but, according to Hariri, it will take time for the directive to reach and be implemented by all the lenders.

Seyyed Hossein Salimi, the deputy head of Money and Capital Commission at TCCIM, also pointed to FATF regulations as the reason behind the restrictions, but stressed that "the matter does not include just the bank accounts belonging to Iranian companies" and is more inclusive.