Iran Remains Out of Reach of U.S. Banks

Despite the lifting of some U.S. sanctions following the historic nuclear agreement, Iran remains fundamentally out of reach of U.S. banks. AFP reports that the U.S. government eased some trade restrictions with Iran last month, including previous so-called 'secondary' sanctions that threatened to penalize non-U.S. companies for doing business with Iran, as well as some limitations on Americans seeking to achieve success in this oil-rich country. Most of the remaining 'primary' sanctions, linked to allegations of Tehran's support for terrorism, are still in place, preventing U.S. businesses from joining the rush of non-American companies to benefit from Iran's potential revival. This means that U.S. banks have limited access to oil-rich Iran compared to their competitors in other countries. U.S. banks generally cannot process transactions for American companies and other firms operating in Iran, and the Iranian government and private Iranian entities cannot open accounts in U.S. banks. Acting Director of the U.S. Treasury Department's Office of Foreign Assets Control, John Smith, told a U.S. congressional panel last Thursday, 'The broad primary sanctions of the United States on Iran remain in place. This means that American individuals are generally prohibited from participating in transactions or dealings with Iran or Iranian entities unless the transactions are exempt from regulations or licensed.' The sanctions that remain in effect are due to the Islamic Republic's record on terrorism and human rights, thus the facilities created from the nuclear agreement have had no impact for Americans so far. Hamid Zangeneh, an economist in the U.S., told Radio Farda that the existing barriers in U.S.-Iran trade mean that 'as long as these banking restrictions are not lifted entirely, the U.S. will remain in the same position it was before the sanctions three or four years ago, meaning that American companies cannot easily engage in trade relations with Iran, and as a result, Europe and Asia will be in a better position to trade with Iran, which will hurt a few specific American companies but will not harm the U.S. economy overall since Iran's trade is relatively small compared to total U.S. trade.' Nevertheless, many are still eager to seize opportunities in Iran. They have turned to legal experts and other professionals to explore changes in the legal landscape. According to AFP, Kamran Momtaz, a spokesman for Citigroup, stated that they are monitoring developments in Iran. Foreign banks in the U.S. also face challenges and restrictions in relation to Iran due to the sanctions that remain in place. John Smith also stated during a hearing of the House Foreign Affairs Committee last Thursday that 'secondary sanctions still apply to over 200 individuals and entities on the sanctions list and to any such individuals we may add to this list in the future.' U.S. policy has allowed banks to lend in certain matters and activities related to Iran. Companies that receive special licenses from the U.S. Treasury Department, such as Boeing and General Electric, have received such loans. U.S. banks can also lend to American companies importing Iranian food products and Persian carpets.