LONDON – Britain is working with its European partners to help ease the impact of banking restrictions on trade with Iran, Business Secretary Sajid Javid said Wednesday, adding that the UK had signed a deal to simplify the financing of exports.
International sanctions, including banking restrictions, imposed against Iran ended in January under a deal with world powers in which Tehran agreed to curb its nuclear program.
But U.S. measures including a ban on dollar trading and a freeze on U.S. banks engaging in trade remain in place. This has left non-U.S. banks and insurers wary of processing transactions with Iran, fearing they may still fall foul of the existing measures and a lack of clarity on what they are able to do.
Javid told a conference in London that issues around cash and credit were “quite significant” but that Britain was working with other European nations and the banking industry to try to tackle them or provide clarity on how the guidelines work.
“For many firms it’s not actually clear what you can or cannot do according to, let’s say, U.S. rules. That’s why one of the things that as a minimum has to be done quite quickly is to bring some clarity,” he said.
Britain’s trade envoy to Iran, former finance minister Norman Lamont, outlined the scale of the problem, saying he had struggled to get bank chiefs in London to meet with a recent delegation from the Iranian central bank.
“Terrified, they were,” he said. “European banks, very much so the British banks, are very frightened of falling foul of what I would call the extra-territorial reach of American law.”
Britain’s export agency and its Iranian counterpart signed a memorandum of understanding on Wednesday, Javid said.
The deal will see UK Export Finance and the Export Guarantee Fund of Iran, the Iranian state-owned credit insurance company, work together to identify opportunities for trade in capital goods, equipment and services, Britain’s business ministry said.
Other European Union countries including Italy, France and Germany have already struck billions of dollars worth of deals and many within Britain’s business community complain that the country has been slower to respond.
Shrugging aside such concerns, Javid said “It’s never too late.” He added that he would lead a British trade mission to Iran later this year, possibly as early as May.
Javid said membership of the European Union had been helpful in terms of facilitating the removal of sanctions, but added that Britain’s June 23 referendum on whether to remain a member of the 28-nation bloc was not a risk to future trade with Iran.
WILLIAM JAMES AND JONATHAN SAUL