Why big Euro Banks are Reluctant to Return to Iran

Beheshti Rouy said Bank Pasargad, which unlike Iran’s Central Bank was never severed from the SWIFT system of electronic transactions, does its own due diligence to make sure that no prohibited dual military/civilian use items are involved, that the buyer and seller are clear and that no individual still sanctioned by the US government is involved.

“We don’t understand what kind of risk is associated with these transactions,” he said. “What we are asking for is just trade finance and is completely transparent.”

Iranian officials have also complained that a lack of indirect access to the US financial system has complicated their ability to access billions of dollars in oil revenues that had been frozen primarily in Asian banks. Beheshti Rouy said the US government should allow use of the dollar as an “accounting tool” to facilitate conversion of currencies such as the Omani riyal and Indian rupee into euros.

George Kleinfeld, a lawyer and sanctions expert at the Clifford Chance law firm in Washington, told Al-Monitor that OFAC could issue a general license to permit conversions that only involve the US dollar incidentally and do not require actual transfers of funds through US institutions — so-called U-turns.

Kleinfeld attributed the reluctance of big European banks to return to Iran less to the hangover from multibillion-dollar settlements than to US sanctions that forbid American citizens from any business dealings with Iran except in a few specified areas. A number of Americans work as senior executives in these banks, and it is difficult to wall them off completely from Iranian business, Kleinfeld said.

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