Last updated: 23 March, 2016

Banks dealing with Iran must respect embargo, says US official

Foreign banks looking to deal with Iran following the lifting of sanctions must avoid engaging with entities that remain subject to an embargo by Washington, a US official said Wednesday.

“What banks need to be careful about now is … not doing business with sanctioned parties in Iran, and there are some that are still sanctioned for terrorism,” said Chris Backemeyer, the principal deputy coordinator for sanctions policy at the US Department of State.

Speaking to reporters in Dubai, Backemeyer, who was one of the negotiators in the talks that resulted in Iran’s nuclear deal with major powers, named the Revolutionary Guards in particular.

In July last year, world powers including the United States signed a landmark deal with Iran known as the Joint Comprehensive Plan of Action (JCPOA) to lift crippling economic sanctions in exchange for curbs on Tehran’s nuclear programme.

But banks still face restrictions in the United States on handling transactions involving Iran.

“They (banks) need to be careful, and they need to be careful not to route things through the United States because… it’s still prohibited for transactions (to go) through the United States,” Backemeyer said.

The US official was in Dubai as part of a delegation to explain the deal with Iran to businesses. He pointed out that the US embargo on Iran “remains in place.”

“Americans cannot engage in commercial activities with Iran. American companies aren’t buying Iranian oil and haven’t been for a couple of decades. That part hasn’t changed,” he said.

He said there are a few exceptions to the US embargo introduced by the Iran nuclear deal, including the export of aircraft of US origin for explicit civilian use.

The exemptions also allow the importation of Iranian foodstuff and handicraft, and permit subsidiaries of US firms incorporated abroad to engage with Iran as far as the JCPOA permits.

“We are 100-percent committed to fulfilling our obligations under the JCPOA and we are in no way trying to stand in the way of legitimate business activity in Iran,” Backemeyer said.