Italy and Iran hope to resume banking ties that had been disrupted due to the international sanctions, Central Bank of Iran Governor Valiollah Seif said Monday in a meeting with Italy's Deputy Minister of Economic Development Carlo Calenda.
"Since the two countries are determined to conduct large-scale baking transactions, a return to pre-sanctions banking collaboration is the first requirement," Seif said.
The two sides stressed the need for establishing a correspondent banking relationship immediately after Iran's nuclear agreement with P5+1 nations – known as The Joint Comprehensive Plan of Action—is implemented.
Seif added that renewed ties between the two nations would help turn Iran into a gateway for Italy to access regional markets.
"Opening LCs for banks requires insurance which should be provided by the Italian insurer, SACE," Seif demanded.
He also asked for Iran's credit ratings to be upgraded at least to pre-sanctions levels.
Seif noted that discussing Iran's debts was also a primary issue saying Iranian banking sector has always fulfilled its financial commitments.
"Any delay in settling our debts were due to the sanctions and we expect Italy not to charge any interest on those debts," he added.
Comparative Advantage
Seif said that manufacturing costs in Iran are lower than in other countries in the region, which is an investment advantage for the country.
Calenda noted Iran's return to the international economic scene was heralded in Geneva, an event which he considered the most important news of the outgoing year.
"Italy wants to revive trade ties with Iran in new forms," he said.
He said his country intends to remove any obstacles in banking relations with Iran by January 2016 when the sanctions are expected to be removed.
"SACE is working on an agreement to eliminate all the delays in foreign exchange transactions by January," he said.
Italy is determined to increase the total volume of trade with Iran to 2011 leveld."We have asked SACE to start relations with Iran in the same manner it conducts trade with Germany and France."
Calenda noted that future relations between Iran and Italy should not be limited to oil and gas sectors. He pointed to President Hasssan Rouhani's upcoming visit to Italy and said, "His visit is of high importance for us as it will pave the way for reopening of (two-way) banking operations."
MoUs With Private Banks
During the Italian government’s business mission to Iran, SACE signed three collaboration agreements with the major Iranian private banks - Bank Pasargad, Bank Parsian and Saman Bank - aimed at facilitating a more rapid and effective resumption of trade and investments between the two sides, once the "implementation day" of the nuclear agreement begins.
SACE and the banks intend to initiate collaboration, consistent with regulations and restoration of the payments system, to identify short- and medium/long- term projects of mutual interest and develop the insurance-financial structures best suited to support them.
“A new era is commencing for economic relations with Iran, thanks to the important steps taken forward at the international level, the SACE head, Giovanni Castellaneta said. He is a former Italian ambassador to Tehran and Washington.
According to SACE estimates, the end of the sanctions might bring an increase in Italian exports to Iran of almost €3 billion by 2018, with the best opportunities in machinery, oil & gas, and transport.
Insurance Cooperation
The Italian Sace Insurance Company is ready to provide insurance services up to €5 billion to Iran's mining industries, reported the Iranian Mines and Mining Industries Development and Renovation Organization on its website.
Giovanni Castellaneta, said in a meeting with IMIDRO head, Mehdi Karbasian that expanding ties with Iranian companies especially with IMIDRO is a high priority for his firm adding that his company is willing to increase the €5 billion initial investment.
Karbasian said that a number of MoUs have been signed with Italian companies including Sace, in steel and aluminum industries. He stated that IMIDRO will present the projects which need insurance coverage to Sace and expressed hope that the Italian firm can help Iranian firms execute major projects.
Sace, a well-known Italian firm, actively participated in providing insurance coverage for big projects in Iran including in the key steel and aluminum industries prior to the sanctions and is now keen on reestablishing ties.
