U.S. says it's not deterring foreign banks in Iran

Wed Mar 23, 2016 8:48am EDT
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By Sam Wilkin

DUBAI (Reuters) - The United States is not standing in the way of foreign banks doing business with Iran, a senior U.S. official said on Wednesday, but his comments appeared unlikely to satisfy frustrated businessmen and Iranian officials.

Most international sanctions against Iran's economy were lifted in January after Tehran implemented a deal with world powers to curb its nuclear program. But Washington kept some sanctions that were originally imposed over missile proliferation and alleged support of terrorism.

The fear of being caught up in those remaining sanctions has deterred most foreign banks from restoring links with Iran, angering the Iranian government, which complains it is not getting economic benefits it was promised in the nuclear deal.

Chris Backemeyer, Principal Deputy Coordinator for Sanctions Policy at the U.S. Department of State, said U.S. officials were meeting business leaders around the world to assure them that Washington was complying with the nuclear agreement.

"We've tried to make it 100 percent clear," Backemeyer told reporters in Dubai, where he was meeting local and international companies to explain what the U.S. saw as legitimate business with Iran and what it viewed as illegitimate.

He said that while U.S. banks were still banned from dealing with Iran as part of a trade embargo that remains in place - effectively blocking U.S. dollar transactions, since they would ultimately be cleared in the United States - Washington would not penalize foreign banks for doing business in other currencies.

However, Backemeyer also said foreign banks would need to demonstrate they had performed due diligence to ensure they were not doing business with sanctioned entities in Iran, such as companies linked to the Revolutionary Guards.

That appeared unlikely to reassure bankers from Europe, the Middle East and other countries, who say the remaining sanctions are so complex, and the risks of errors in due diligence so high, that they still don't dare to engage with Iran.   Continued...

A money changer counts out U.S. dollars for a customer in Tehran's business district, Iran, January 20, 2016. REUTERS/Raheb Homavandi/TIMA