Austrian Oberbank Ends Cooperation with Iran Due to US Sanctions

Austrian Oberbank announced on Wednesday, June 13, that it is ending its economic cooperation with Iran as US sanctions have increased the risk for European companies. Oberbank signed a contract with Tehran on September 23 last year, allowing it to finance new projects in Iran. It was one of the first European banks to enter into such an agreement with Tehran after the nuclear deal with world powers. However, conditions have changed with the US withdrawal from the nuclear agreement and the imminent return of sanctions against Iran. Although European countries that signed the nuclear agreement have emphasized their desire to maintain the JCPOA, many companies have expressed concern about the increased risk of doing business with Iran. Oberbank stated on its website, "Oberbank has supported many clients engaged in trade with Iran over the past two years. The threat of US secondary sanctions targeting European companies is forcing us to retreat." Reuters reports that Oberbank has currently halted financing projects in Iran as a precaution. The bank stated that financial transactions and financing for Iranian projects will only continue for contracts signed before May 8 (April 18). Ultimately, Oberbank advised its clients to immediately cease financial transactions related to Iranian projects, as any payments after November 4 are likely to be impossible. November 4 (Aban 13) is the deadline set by the US government for foreign companies contracted with Iran to end their cooperation with Tehran. One day before Oberbank's announcement, Iranian President Hassan Rouhani threatened in a phone conversation with his French counterpart that if the Islamic Republic could not benefit from the nuclear deal, remaining in it would not be feasible. Nevertheless, the European Union has announced that it is seeking solutions to ensure European companies' investments in Iran and their immunity against future US sanctions. In recent weeks, major companies such as Total, Maersk, Peugeot, General Electric, Honeywell, Boeing, Lukoil, Reliance, Davor Corporation, Siemens, Mazda, and Hyundai have announced that they are halting cooperation with Iran due to fears of US sanctions.