Exclusive: RBS halts India tanker payment due to Iran sanctions

Mon Mar 26, 2012 7:33am EDT
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By Nidhi Verma and Randy Fabi

NEW DELHI/SINGAPORE (Reuters)- The Royal Bank of Scotland (RBS.L: Quote) has halted payments to a Greek ship owner which transported Iranian oil for an Indian shipping company, in line with Western sanctions aimed at hindering Iranian crude exports, shipping sources told Reuters.

The European Union in January placed an immediate ban on new contracts to import, purchase or transport Iranian crude and petroleum products. EU members with existing contracts, however, can honor them until July 1.

India's Great Eastern Shipping Co Ltd GESC.NS has not been able to pay Greek firm Eurotankers, which holds an account with RBS, for using one of its supertankers to ship Iranian crude because the UK-based bank would not clear the payment, the sources said.

"Due to financial sanctions the payment could not be released. RBS said they are unable to transmit the money," said one source with knowledge of the matter.

The source said the deal was considered to be a new contract as it was made in the spot freight market. An RBS spokesman declined to comment.

The action by RBS (RBS.L: Quote) adds to the difficulties India and other Asian oil buyers face in trying to maintain imports of Iranian crude amid sanctions.

"Financial institutions are very careful about dealing with Iran related stuff," said Robin Mills of Dubai-based Manaar Energy Consulting.

"Even if activity appears to be okay, they do not like to do it because it is too hard to convince anyone they are complying with sanctions while dealing with Iran oil."   Continued...

A logo of an Royal Bank of Scotland (RBS) is seen at a branch in London February 23, 2012. REUTERS/Stefan Wermuth