* Iran wants economic sanctions lifted
* Banks wary of falling foul of U.S. regulations
* Iran keen to speed up humanitarian trade plan
By Jonathan Saul and Parisa Hafezi
LONDON/ANKARA, March 13 Despite a diplomatic
thaw, Western banks are steering clear of attempts by Iran to
get them involved in financing humanitarian transactions,
fearing they could be penalised under U.S. sanctions, bankers
and government officials told Reuters.
Iran was never barred from buying food or other humanitarian
goods under sanctions imposed because of its disputed nuclear
programme, but measures by the European Union and the United
States have made trade generally more difficult over the past
two years by hindering payments and shipping.
As part of talks in Geneva over the nuclear question, Tehran
is pressing world powers to speed up trade finance arrangements
on humanitarian deals involving both Western and Iranian banks,
according to an Iranian government document seen by Reuters and
sources familiar with the initiative.
Iranian government officials and international trade sources
say Tehran wants to simplify complex trade finance arrangements
potentially worth billions of dollars, which would alleviate
pressure on the country's sanctioned banking system.
According to a joint plan of action agreed in November in
Geneva, world powers would "establish a financial channel to
facilitate humanitarian trade for Iran's domestic needs using
Iranian oil revenues held abroad".
"This channel would involve specified foreign banks and
non-designated Iranian banks to be defined when establishing the
channel," the action plan said.
Iran, with its economy under severe pressure, is keen to
push this process forward.
"We have been informed that according to the negotiations
and agreements done in Geneva, the possibility to exchange
direct LCs (letters of credit) between seven European banks and
eight Iranian banks for food, medication and humanitarian goods
has been provided," the Iranian government document seen by
Reuters says, although it made clear this was not final.
"Please note, that we can accept no legal liability
regarding this information as it remains to be officially
confirmed by the responsible authorities."
The U.S. Treasury Department and EU officials declined to
comment on specific banks.
A U.S. Treasury official said the United States is working
with banks and governments in Asia and Europe to establish
mechanisms for humanitarian trade with Iran, and multiple
channels were ready for Iran to purchase humanitarian goods.
A different U.S. official told Reuters separately that
Washington was having trouble persuading some big banks to work
on the issue.
"Some banks are willing to play a part here. But not all of
them. There are a lot of big banks that have been subject to
fines for engaging in transactions that were in violation of
U.S. sanctions that aren't willing to do anything - even
humanitarian," the official said.
"They just are not willing to do business with Iran. And we
are not in a position to say, you have to."
Banks may well feel the need for caution in this area.
Regulators in New York and Washington are looking at
potential violations by France's Credit Agricole and
Societe Generale of U.S. sanctions imposed against countries
like Iran, a person familiar with the investigation said.
In 2012 New York regulators threatened to revoke Standard
Chartered's banking licence after it broke sanctions on
Iran. HSBC was fined $1.92 billion by U.S. regulators
for various violations including doing business with Iran. In
February, BNP Paribas set aside $1.1 billion for a
possible fine for breaching U.S. sanctions on countries
Several banking sources, speaking on condition of anonymity
due to the sensitivity of the subject, said Western banks were
wary of getting involved in the latest initiative. One said
banks would need cast-iron assurances that they would not face
exposure before even considering it.
"It is only natural that banks will be cautious to what the
political world offers. It changes so quickly, as events in
Ukraine can attest," the banker said.
"What we could be looking at is very short-term financings
or involvements and structures, so you will have optionalities
to exit should anything go wrong," he added. "Banks will need
Iran and Western governments reached an interim agreement in
November last year over Tehran's atomic work in exchange for
limited sanctions relief for six months.
By late July, Western governments hope to hammer out an
accord that would lay to rest their suspicions that Iran is
seeking the capability to make a nuclear bomb, an aim it denies,
while Tehran wants sanctions lifted.
Iranian government officials said the document, which has
been sent to Iran's Supreme National Security Council, tasked
with safeguarding Tehran's interests, listed the following banks
as "available for further actions": Standard Chartered Bank
(London), Societe Generale (Paris), Banque de Commerce et de
Placements (BCP) (Geneva), UniCredit Bank (Munich), Commerzbank
(Frankfurt), United Bank (Zurich) and BHF Bank (Frankfurt).
It was not clear whether these banks had been approached to
provide finance. Two business executives familiar with the
initiative said they were aware that Standard Chartered, Societe
Generale, Commerzbank were among those on the wish list.
Commerzbank, Societe Generale, United Bank and BCP all
declined to comment. A spokeswoman for Standard Chartered said
the bank was not involved and would not get involved in any
transaction with any party from Iran.
Unicredit said the group was "not aware of, and hence is not
participating in any international initiative involving
financial institutions related to Iran subsequent to the P5+1
(major powers) accord". BHF Bank said it was "not offering or
providing any financial services with links to Iran".
Swiss and German banking regulators declined to comment,
although officials in Germany said if German banks were still
rigidly adhering to prohibitions on doing business with Iran,
the government was ready to explain that some of those
restrictions were eased in November.
"If banks in Germany apply the restrictions too rigidly and
cautiously in financial transactions with Iran, the government
would encourage them to clarify the possibilities that can be
done under the agreement, not in order to relax or change these
thresholds, but to help the banks keep in compliance with the
action plan," a German finance ministry official said.
IRAN EAGER FOR DEAL
The document also named the following Iranian banks:
Eghtesad Novin Bank, Parsian Bank, Bank Pasargad, Karafarin
Bank, Sarmaye Bank, Saman Bank, Bank Maskan and Bank Keshavarzi.
"Iranians are very eager to have this as soon as possible
and teams are working on it and all reports go to the Supreme
Leader (Ayatollah Ali) Khamenei," one senior Iranian government
official familiar with the nuclear talks said.
"It was an Iranian initiative but the other party (Western
powers) also agreed on that, though they had some internal
dispute on the list of Western banks," the official said.
"There have been some direct contacts between Iranians and
various bank officials in Europe since November (the Geneva
deal) but the final agreement needs more work and meetings."
The Iranian banks named in the document referred the issue
to Iran's central bank, which declined to comment.
A Western diplomatic source confirmed the initiative was
under discussion and Western powers saw such an arrangement as
increasing the transparency of trade deals.
"If you have Western banks, many of whom with U.S.
operations, potentially involved in such an initiative it is a
better situation than having hundreds of middle men in such
trades where you cannot track where the money is going. It also
allows much stricter governance on the part of those banks. This
is the idea at least," the diplomatic source said.