Iran "hits impasse" in bid to set up Bank of England clearing accounts

By bne IntelliNews March 21, 2017

Iran is failing to make headway with a request to the Bank of England (BoE) to set up special clearing accounts for its banks, Reuters reported on March 20.

Sources said the BoE presently seemed uninterested in resolving an impasse that leaves Iran excluded from banking in London more than a year after international sanctions against Tehran were lifted by the major powers following its nuclear deal with the West.

Iran’s failure to convince Western banks to accept its business has been one of the main obstacles preventing its swift reintegration into global trade.

BoE clearing accounts for the Iranian central bank or the British subsidiaries of Iranian banks would allow the making and receiving of payments in sterling.

"That would send a huge message to the market. What commercial bank is practically going to stop Bank of England payments? None," one Western source told the news agency.

A senior Iranian banking official in Tehran reportedly observed: "The Bank of England has suspended anything related to Iran, even the latest scheduled meeting was cancelled. Everything has been put on hold."

Although EU and UN sanctions over Iran's nuclear programme were lifted in January last year, the US still has separate restrictions in place in relation to Iran's missile programme, and the Trump administration has promised to take a tough line with the Iranians.

Western banks, wary of infringing any measures retained by Washington, are treading very carefully when it comes to handling business involving Iran.

Even Iran's embassy in London has so far been unable to open a British bank account, Reuters reported.

Three Iranian banks have subsidiaries with licences to operate in Britain, namely Melli Bank, Bank Sepah International and Persia International Bank.

Iran's Supreme Leader Ayatollah Ali Khamenei has accused Washington of undermining Iran’s post-sanctions era by scaring investors away from Iran.

"On paper America lets foreign banks deal with Iran, but in practice they create Iranophobia so no one does business with Iran," Khamenei said in April last year.

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