Misleading Claims About U.S. Barriers To Iran-Europe Financial Ties
Wednesday May 4, 2016
Few people understand that Iranian banks do not live up to the standards U.S. agencies require of all foreign financial institutions, and that this shortcoming has nothing to do with the nuclear deal.
On April 25, following the first post-Implementation Day meeting of the joint P5+1/Iranian committee in Vienna, Deputy Foreign Minister Abbas Araqchi stated that all parties had approved the creation of a task force to address his government’s complaints about sanctions removal related to the nuclear deal. This was the latest step in Iran’s largely successful campaign to blame the United States for the various problems that continue to hinder its businesses, especially in terms of accessing the international banking system.
On April 15, Iranian foreign minister Mohammad Javad Zarif told reporters that Tehran and the EU “will put pressure on the United States to facilitate the cooperation of non-American banks with Iran.” Visiting EU foreign policy chief Federica Mogherini was present at the joint press conference, and news accounts of the event implied that she agreed with Zarif, though she did not say so directly. The Wall Street Journal wrote, “The absence of large western banks to underwrite deals and set up broad financial links is stymying the delivery of concrete projects, [and] European officials fear this could spark a downward spiral of mistrust over the nuclear accord.” Similarly, an Iranian business consultant told the New York Times, “If the situation doesn’t change for the better — banking, more deals — for Iran this will be a growing risk for the deal.” The paper also quoted European Parliament member Marietje Schaake complaining that “Europe is being held hostage by American policy…We negotiated the nuclear deal together, but now the U.S. is obstructing its execution.”
Indeed, Washington has erected significant barriers to Western banks seeking to work with Iranian banks. Yet the reasons for this practice have nothing to do with the nuclear issue. In fact, some of the most significant obstacles are completely unrelated to any of the deep foreign policy differences between the United States and Iran.
THE TAX AVOIDANCE EXAMPLE
One of the most serious barriers that banks and insurance companies face when contemplating transactions with Iranian financial institutions is compliance with tax avoidance l...