European banks – US – penalties – Iran

US Secretary of State John Kerry is set to meet with key European bankers in London to reassure them that they will not be penalized for having business with Iran.

(May 12, 2016)

Kerry and his British counterpart Philip Hammond will meet with the representatives of the major banks in London’s Mayfair district on Thursday to ask the financial institutions not to use the US as “an excuse” for not doing business in Iran.

Executives at Standard Chartered, HSBC, Barclays, Deutsche Bank, BNP Parisbas, Santander, Lloyds Banking Group and Royal Bank of Scotland are among the  banks invited to attend the meeting.

Some UK banks are reportedly willing to do business with Iran but remain uncertain about US punitive measures against possible deals with Tehran.

The banks apparently remember past fines from US regulators for ‘breaking’ sanctions. StanChart and HSBC banks have paid more than $15 billion in fines for breaching sanctions in various countries over the past five years.

BNP Paribas SA was sentenced last year to five years probation by a US judge in connection with a record $8.9 billion settlement over claims that it violated sanctions against Iran, as well as Sudan and Cuba.

File photo shows US Secretary of State John Kerry (R) and his British counterpart Phillip Hammond. ©AFP

Also, US regulators said in November 2015 that the Deutsche Bank will pay $258 million in fines for doing business with US-sanctioned countries like Iran and Syria.

The Thursday meeting comes only a few weeks after the British Bankers Association (BBA) established a high-level panel to assess the removal of Western sanctions on Iran.

The removal of sanctions was part of a last July agreement reached between Iran and the permanent UN Security Council members plus Germany (P5+1) that went into effect in January.

Under the deal, Tehran agreed to put some restrictions on its nuclear energy program in exchange for relief from economic sanctions that had been imposed on Iran over accusations that it was pursuing non-civilian objectives in its nuclear program.

Earlier, Hammond said in a statement sent to the Financial Times ahead of the meeting that “we want our banks to be able to support British companies working in Iran.”

“It is in our economic interest, as well as Iran’s, that legitimate business is supported. After many years of restricted relations some challenges remain, but we are working through them with international partners, Iran and the banking community,” the statement added.

The UK government has urged British banks to expand economic ties with Iran ahead of an official visit of a trade delegation led by Business Secretary Sajid Javid to Tehran later in May.

Kerry told reporters on Tuesday that “businesses should not use the United States as an excuse if they don’t want to do business, or if they don’t see a good business deal … that’s just not fair, that’s not accurate. We sometimes get used as an excuse in this process.”

Hammond, however, has said that there is a gap between the political intentions of the United States and the reality for European banks.



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