Iran Banking Issues With China, UAE Resolved

A senior Iranian official announced that there are no significant banking issues with China and the UAE, as hurdles with Turkish Halkbank are being removed.

“About two months ago, there were reports that bank accounts of Iranian petrochemical companies in China are being blocked but the issue was mostly resolved through a series of negotiations,” Hossein Yaqoubi, director general of International Affairs Department at the Central Bank of Iran, was also quoted as saying by Fars News Agency.

The official noted that Iranian citizens and students in China had experienced the same problem with their banks, but those issues have also cleared as the two countries are resuming their banking ties.

In recent weeks, there have been numerous reports of Iranian account closures first in China and then in the UAE, which heightened fears that the tougher line espoused by the new US administration is pushing global banks to further isolate Iran.

As Yaqoubi elaborated, every once in a while the Office of Foreign Assets Control of the US Treasury Department focuses on the banks of a particular country.

The CBI official noted that in line with that policy and in order to create hurdles for Iran, OFAC started pressuring Chinese banks to cut their ties with the Middle Eastern country, claiming that they [Chinese banks] are not implementing the intensified regulations of Financial Action Task Force.

“We vigorously followed up the issue as we noted in our first letter to Chinese supervisory officials that the closure of the bank accounts of Iranians is improper and we do not expect such things to happen, especially considering that the Asian superpower is Iran’s biggest trade partner both in terms of imports and exports,” he added.

He noted that Chinese officials said there was no pressure from them on the banks but they took those actions on their own to demonstrate their determination in implementing the FATF regulations.

“Currently, Chinese banks do not block Iranians’ accounts but they might be a little more sensitive about them,” he said.

According to Yaqoubi, these regulations do not concern Iranians alone, but the documents of citizens of any other country who want to open an account or transfer money have to be assessed.

“Banks are obligated to determine the source of the money and its destination to check whether they are on any sanctions’ list or linked to any terrorist organization,” he added.

 Turkey, Emirates

The CBI official also announced that the Iranian banking system’s issues with Turkish Halkbank have mostly resolved.

“The Turkish bank considered heavy restrictions on two Iranian banks, but we solved the issue through a series of negotiations with their officials,” he added.

A few months ago, Iran-Turkey banking ties were overshadowed by the detention of a senior Halkbank official in the US in March for allegedly violating Iran sanctions. The incident caused problems for Iranian business transactions with the major state-owned lender in the neighboring country.

According to Yaqoubi, political matters significantly affect banking relations between two countries and during Turkish President Recep Tayyip Erdogan’s recent visit to Tehran, it was agreed that Iranian banking system link up with a major Turkish bank and fortunately most of the process is already complete.

“Five Iranian banks have requested to establish correspondent relations with the Turkish bank. The move can notably reduce the costs of money transfer between the two countries and Halkbank will no longer be the only bank in Turkey with correspondent relations with Iran,” he added.

The official further said the closure of Iranian bank accounts by UAE banks was only confined to the Emirates NBD banking group that has had no role in Iran-UAE banking relations.

“After international sanctions against our banking system were intensified, NBD was one of the first Emirati banks that ended all its correspondent relations with Iran,” he said.

Yaqoubi stressed that transferring money to UAE still goes through the banking system even if money exchangers handle most of the transactions, clarifying that this does not mean banking relations between Iran and Emirate are blocked.