With Iranian frustration growing over a lack of access to assets held abroad, Secretary of State John Kerry said the US won’t stand in the way of foreign banks working with Iran in the wake of a nuclear deal that was meant to end some sanctions on the Islamic Republic.
“We have no objections, and will not stand in the way of, foreign banks from engaging with Iranian banks and companies as long as those banks and companies are not on our sanctions list for non-nuclear activities,” Kerry said on Friday in New York before a meeting with Iran Foreign Minister Javad Zarif. “Unfortunately, there seems to be some confusion among some foreign banks, and we want to try to clarify that as much as we can.”
Kerry and Zarif resumed talks started earlier this week aimed at freeing up anywhere from $50bn to $100bn Iran holds abroad that was originally frozen by UN sanctions over the country’s nuclear programme. While the nuclear sanctions were lifted earlier this year, Iran says foreign banks are still wary of violating older sanctions and regulations imposed by the US
Zarif said it’s important for the Iranian people to see the “benefits that Iran should derive” from the nuclear accord, adding that the two countries continue to have differences which are “quite serious” in other areas. The costs for violating sanctions can be severe. French bank BNP Paribas agreed to pay $8.9bn in July 2014 for violating US sanctions against Sudan, Cuba and Iran. Germany’s Commerzbank agreed to pay $1.45bn for moving funds through the US financial system for Sudan and Iran.
Beyond limiting access to Iran’s existing assets abroad, the delay in establishing regular banking relations with major European banks could hold up deals, including Iran’s January agreement to buy 118 Airbus planes worth $27bn.
Iran has said it wants the US Treasury Department to issue guidance to foreign banks clarifying the types of transactions and activities that are permitted. Kerry offered a less formal suggestion ahead of the meeting. “If banks have questions, we are happy to answer those questions,” Kerry said. “When in doubt, ask.”