Banks Absent From U.K. Trade Trip to Iran Amid Sanction Concerns

  • Delegation of 25 companies visited Tehran to assess openings
  • Possible sanctions `snap-back' a worry for bank chiefs

Major British and European banks want greater clarity on how sanctions on Iran will be lifted before they investigate openings in the country, the head of a recent U.K. delegation to the Islamic Republic said.

Twenty-five British companies were in Tehran this week on a trip organized by the British-Iranian Chamber of Commerce. But leading banks weren’t among them, Richard Dalton, a former U.K. ambassador to Iran and chamber president, said in an interview in Tehran. Nor were oil majors BP and Shell, he said, though both have said they’ve visited Iran in recent months.

“British second-tier banks are exploring opportunities in Iran,” Dalton said. But U.K. “and European first-tier banks are waiting for greater clarity from the United States about the impact of the banking boycott and how that’s going to be wound down.”

Relations between Iran and Britain have improved since the nuclear deal was signed on July 14. After being closed for almost four years following an attack by protesters in 2011, Prime Minister David Cameron’s government reopened the U.K. embassy in Tehran in August.

Representatives of the British Bankers’ Association met Iran’s central bank governor in Tehran in August when they were part of a visit by U.K Foreign Secretary Philip Hammond.


At least 10 European trade delegations have visited Iran since the nuclear pact was signed, including groups from France, Germany and Italy.

The lifting of sanctions depends on Iran’s compliance with the terms of the July accord, and the curbs can be reimposed under a so-called “snap-back” mechanism if Iran is deemed not to have lived up to its obligations.

“U.K. banks will err on the side of caution, given the fines imposed on Standard Chartered in the past,” said Charles Robertson, global chief economist at investment banking firm Renaissance Capital. “My understanding is that they don’t need to wait, but show me a lawyer who is prepared to put his or her neck on the line and say it’s 100 percent fine for European banks to get involved.”

London-based Standard Chartered Plc agreed to pay $667 million in 2012 for its role in hiding or disguising the identity of Iranian clients in billions of dollars’ worth of wire transfers.

Dalton would not name the companies in the delegation, saying that it was up to them to declare their involvement.

John Whittaker, a partner at London-based law firm Clyde & Co., joined the trip to “consider the changing landscape in Iran,” he said on the final evening of the group’s stay.

Another delegate, Alain de Brauwere-Bentinck, a corporate finance executive traveling in a personal capacity, said he had been “impressed by the openness and willingness of the authorities and the business people to do business with the U.K.”

New oil contracts being prepared by Iranian authorities “look much more open and attractive than the buy-back contracts, they look very promising,” he said. “Unfortunately as long as there are sanctions I cannot do anything.”

The contracts, which offer higher rewards for investments in riskier oil fields, are due to be fully unveiled at a November conference in Tehran.

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