Publish Date: Fri, 29 Apr 2016 18:33:47 GMT
UK banks to study Iran sanctions impacts to boost cooperation
Britain's biggest banks are to set up a high-level panel to navigate the implications involved in the removal of sanctions against Iran while US says there is not obstacle in the way of foreign economic engagement with Tehran.
Sky News has learnt that the British Bankers' Association (BBA) has agreed to form a working group to examine the implications of the sanctions move.
The decision to establish the group was reached at a BBA board meeting last week, according to industry sources.
The working group's creation comes as UK banks come under pressure from the government to expand links with Tehran ahead of a trade visit to Iran led by Sajid Javid, the British Business Secretary, which is due to take place next month.
Jes Staley, the Barclays chief executive, responded to a letter from British Prime Minister David Cameron earlier this year on the issue in which he referred to "the considerable divergence in both approach and intention between the EU, which is taking a positive approach towards Iran, and the US, where primary sanctions remain in place, thereby prohibiting US individuals or entities from engaging directly or indirectly in business related to Iran".
The prime minister had accused Barclays of operating "in opposition to the policy of the UK government" by declining to process customers’ payments from Iranian entities.
UK-based exporters have complained that they have already slipped behind their competitors from France, Germany and Italy because of a lack of support from the British Embassy in Tehran, which reopened last year, having been closed since 2011.
Lord Lamont, who has been appointed as the British prime minister's trade envoy to Iran, acknowledged that the UK was trailing its European rivals.
"Britain suffered a bit because the government not only enforced sanctions but actively discouraged even legal trade while sanctions were in place, the result was that British trade collapsed by much more than that of Germany, France, Italy," he told Sky News in an interview in February.
"Even America has exported more to Iran recently than we have."
The anxiety among some London-based bankers stems from both US lenders and American executives who work for British and other international companies.
World Bank keeps distance
Daily Mail reported that the World Bank aims to eradicate global poverty, but its push stops at the Iranian border despite the removing of sanctions against Tehran.
The Washington-based development bank seems reluctant to reengage in a country where it stopped all new projects in 2005 in compliance with the sanctions imposed over Iran's nuclear program.
But since those sanctions were removed in January in the wake of a nuclear deal between Tehran and world powers, the World Bank has not shifted.
"We're following the situation very closely ... we don't have any specific plans yet," said World Bank President Jim Yong Kim.
The United States, the largest World Bank shareholder, and the primary supporter of Kim, an American, sends mixed signals on just what is acceptable in doing business with Iran.
Crucially, while sanctions tied to Iran's nuclear program were lifted, US primary sanctions which the country has imposed on Iran over baseless accusation of support for terrorism and human rights remain in place.
In theory, those remaining sanctions don't prevent the World Bank or other international financial institutions to engage with Iran, a spokeswoman for the US Treasury told AFP.
But, she added, the US representative at the Bank has other constraints.
"Current legislative mandates direct the United States executive director to vote against World Bank loans to Iran," she said.
Theoretically the Bank could work around the problem and finance development projects – in the areas of transportation, energy and infrastructure, for example.
But the fact is, a frown on the face of the world's top power and the Bank's largest shareholder cannot be ignored.
Iranian officials complain that the US in practice has not taken enough measures to allow the sanctions to be fully lifted.