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Lack of banking relations is British companies’ main concern for enhancing commercial relations with Iran, said Sirous Mehdizadeh, director of the British- Iranian Chamber of Commerce.
“Banks in the UK paid the heftiest fines for doing business with Iran during the sanctions which has made them cautious in resuming ties with Iranians,” IRNA quoted him as saying on Saturday.
Due to UK banks’ earlier settlements with US regulators for violating the US-imposed restrictions on Iran, Britons cannot easily normalize their trade with Iran to the pre-sanctions level, he added.
In some notable cases, HSBC was fined $1.9 billion in 2012 by US regulators for violations including doing business with Iran, while Standard Chartered paid $667 million in 2012 for violating US sanctions and a further $300 million after more compliance shortcomings were uncovered.
“However, UK businesses are pushing their government to resolve the remaining issues,” Mehdizadeh said. “They do not like to be left behind by their French, Italian and German peers.”
Referring to the UK Export Finance’s £50 million ($71.2 million) initiative to cover UK exports to Iran the day after the lifting of the sanctions on January 16, he said the government in London is keen to boost ties with Iran.
He noted that a British delegation would travel to Tehran following Foreign Minister Mohammad Javad Zarif’s visit to London this week. On Thursday Zarif called on the Obama White House to make a clear public pledge that it would not penalize European banks for legitimate trade with the Islamic Republic. He also said that normal economic and commercial relations could resume with Britain.
Washington still prevents US nationals, banks and insurers from trading with Iran and also prohibits any trade with Iran in US dollars from being processed via the US financial system. This is a significant complication given the dollar’s role as the world’s main business currency.
Iran imported $614 million worth of goods from Britain in the past Iranian year (ended March 20, 2015) and exported commodities worth $72 million, according to data provided by Iran’s Customs Organization. The imports mostly included medicine, medical equipment and grains, while the main export was steel and iron products, handmade carpets, saffron, date and raisins.