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Iran: US Treasury relaxes dollar transaction rules for Iran

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During the Iranian Minister of Economic Affairs and Finance Ali Tayyebnia's visit to Washington on October 8 2016, the US Treasury Department announced that it now permits financial transactions in US dollars between Iran and non-US financial institutions.

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Ali Najm

The only exception includes US dollar transactions involving the American financial system directly or indirectly, which can only be done with specific authorisation from the US Treasury.

Furthermore, in its statement, the US Treasury emphasised that non-American banks or entities cannot refrain from providing services – even to companies that may be controlled or owned by a person or organisation still subject to US sanctions.

The US decided to provide new licenses for banking and trading with Iran after Iran's protest for a lack of commitment to the Joint Comprehensive Plan of Action (JCPOA) agreement.

In this regard, the Central Bank of Iran (CBI) announced on October 16 2016 that banks across the country should not experience any problems by non-American financial institutions providing dollar-related services to Iranians based on the US Treasury's recent update on the Guidance for Doing Business with Iran.

Even though the US government did not fully clear the path to eliminate European concerns over penalties, which may be imposed when dealing with Iran, a number of multinationals have already started cooperating with Iran. The 16th Industry Exhibition of Tehran, which took place during October 2016, hosted many companies from 27 countries – 15 of which were European – with a visible strong presence of German companies.

In this context, it is worth noting the return of Maersk, the largest maritime transportation company, to Iran. Maersk announced on October 20 2016 that they started providing their services from and to Iranian ports. Airbus and Boeing are two more large companies negotiating deals with Iran following the US Treasury's authorisation.

Additionally, the UK Treasury announced on October 25 2016 that, according to the decision made by the European Union, new adjustments will be introduced to EU regulations. Based on the reforms, Bank Saderat of Iran and PLC Bank (the European branch of Bank Saderat) have been removed from the list of Iranian entities that were blocked from doing business because of Iran's nuclear programme.

Iranian media has welcomed the lifting of the obstacle, which has long been criticised because it resulted in ownership relations being used as an excuse for the non-provision of services to banks in Iran.

Ali Najm (ali.najm@eurofast.eu)

Eurofast

Tel: +357 22 699 179

Website: www.eurofast.eu

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