US Should Scrap Rules Hindering Iran Trade

US Should Scrap Rules Hindering Iran Trade
US Should Scrap Rules Hindering Iran Trade

Iran is seeking to get the United States to scrap the restrictions interfering with dealings between non-US banks and financial institutions and Iranian businesses, the foreign minister said.

"We should stop the implementation of the previous US regulations deterring Asian and European financial and monetary institutions from developing banking and financial relations with the Islamic Republic of Iran," Mohammad Javad Zarif was quoted as telling reporters in New York by ISNA on Tuesday.

Zarif's remarks came hours before a meeting with his US counterpart John Kerry to discuss the implementation of the nuclear deal with major powers, the first after the agreement took effect in January.

The July 2015 deal allowed for the easing of sanctions imposed by the United States, European Union and United Nations in return for Tehran implementing temporary curbs on its nuclear program.

Tehran has called on the United States to do more to remove obstacles to the banking sector so that businesses feel comfortable with investing in Iran without penalties. Current US policy bars foreign banks from clearing dollar-based transactions with Iran through US banks.

The US is facing demands from foreign banks to clarify what transactions with Iran are legal and which are still punishable under remaining sanctions.

  Need for Reassurance

Zarif noted that US restrictions previously in place over the sanctions years have been lifted under the accord.

"Now all the businesses hurt by such restrictions in the past should be reassured that there is no risk of sustaining losses in future," he said.    

"We have not been seeking economic ties with the United states. Yet, we do not mind having healthy economic relations with the US. It is the laws passed by the US Congress that have caused problems."

The foreign minister said the Joint Comprehensive Plan of Action was not meant to change such laws but to prevent the US from interfering with Iran's relations with other countries, using the formal title of the accord.

Iran's concerns over the issue were certain to be raised in the meeting between Zarif and Kerry.

"The secretary is very mindful that topic will come up, that that is very much on Foreign Minister Zarif's mind," US State Department spokesman, John Kirby, told a news briefing, Reuters reported.

"The secretary will be ready to talk to them about it."

He declined to say whether Kerry would provide Zarif with any notice of action the administration might take in regard to sanctions relief.

Over the weekend, Zarif said he would ask the United States to ease restrictions on non-American banks doing business with the Islamic Republic, saying it would help reassure Iranians over the nuclear deal.

"Iran will definitely put pressure on the United States to pave the way for the cooperation of non-American banks with Iran," he said on Saturday at a Tehran news conference with visiting EU foreign policy chief, Federica Mogherini.

"The other party, particularly the United States, is required to implement its commitments in banking cooperation."

The White House, Treasury and the State Department have all claimed the US has done what is required of it. Yet, US officials say the administration has been toying with the idea of easing or formally clarifying financial restrictions that prevent US dollars from being used in transactions that enable business with Iran.

Administration officials have ruled out granting Iran access to the US financial system or direct access to the dollar but have left the door open to other steps to encourage trade that is now legal under the JCPOA.

That has met fierce resistance from lawmakers who believe that Tehran would be getting more than it deserves.

   No Sanctions Workaround

On Monday, US House of Representatives Speaker Paul Ryan renewed his opposition to any easing of the current rules.

"The administration should definitively rule out any potential workaround that provides Iran—directly or indirectly—with access to the dollar or the US financial system," he was quoted as saying by AP in a statement.

In a related matter, the State Department said it had sent letters to governors of all 50 US states and some localities, informing them of changes made to federal sanctions as a result of the nuclear deal. Some states and municipalities have enacted local sanctions against Iran.

Kirby said the letter, which was first reported by Bloomberg View, "calls their attention to some of the changes now to our sanctions posture as a result of [the agreement] and encourages them to consider that as they enact local laws for their jurisdiction."

He said the letter does not require state and local officials to take any action and does not order them to change existing laws and regulations. A second unnamed official said the administration was not aware of any state or local law that would violate the terms of the nuclear deal and that the letter was sent mainly in response to questions that had been posed.