Zarif: Europe Should Help Alleviate Psychological Barriers in Banking Interactions

Iran's Foreign Minister has stated that sanctions against Iran have been lifted on paper, but European countries need to make "greater" efforts to eliminate the "existing psychological atmosphere, especially regarding banking interactions." According to ISNA news agency on Saturday, July 5, quoting the Iranian Foreign Ministry, Mohammad Javad Zarif emphasized last week at the International Diplomatic Academy in France that the issue of banking interactions with Iran is not solely related to regulations. Zarif mentioned that part of the problem for banks cooperating with Iran stems from U.S. actions against banks that collaborated with Iran during the sanctions. In recent months, Zarif has repeatedly urged the U.S. to remove the "psychological barriers" regarding European banks' cooperation with Iran and to provide European banks with "guarantees" that they will not be penalized for working with Iran. For instance, he stated on Tuesday, May 30, in Poland that some remnants of the sanctions mentality still exist in European monetary systems due to the heavy penalties these companies faced during the sanctions. The U.S. Secretary of State and his counterparts from Britain, Germany, and France, along with the EU's foreign policy chief, issued a statement on May 19 urging banks and traders not to overlook legal investment opportunities in Iran. These countries also expressed readiness to address any doubts in this regard. Some Iranian officials, including Abbas Araghchi, Deputy Foreign Minister, have stated that besides the concerns of European banks regarding sanctions, the "weakness in financial discipline" of Iranian banks has also played a role in the lack of cooperation from European banks, which the Central Bank is working to address. Additionally, a former supervisory deputy of the Central Bank reported on March 6, 2016, that the Central Bank requested the International Monetary Fund to express its opinion on Iran's banking regulations concerning anti-money laundering to alleviate the concerns of other countries, and the IMF would provide its opinion in 2018. In this context, the Financial Action Task Force, which monitors money laundering globally, decided on Friday to keep Iran on the blacklist of high-risk countries. Despite this decision, the organization stated that it welcomes Iran's promises of improvement and will suspend some restrictions for one year, but if Iran fails to improve its record on money laundering and terrorist financing as promised, severe measures will be taken. Reuters previously reported that removing Iran from this list could significantly aid trade with global banks. The Financial Action Task Force was established in 1989 and controls international standards against money laundering and the financing of terrorism and weapons of mass destruction.