PARIS (Reuters) - Iran’s trade and industry minister urged French banks on Thursday to overcome their wariness about doing business with the country, seeking to drum up much-needed foreign investment.
French banks have been reluctant to handle deals with Iran, deterred by a $9 billion U.S. fine on Paris-based BNP Paribas (BNPP.PA) in 2014 for sanctions violations, even as both governments celebrated renewed ties.
Iranian President Hassan Rouhani and a host of ministers and business leaders were in Paris on Thursday, where the sale of Airbus planes and the renewal of a decades-old carmaking venture were hailed as symbols of thawing relations.
But meetings with leading French banks such as BNP Paribas and Societe Generale (SOGN.PA) were not officially on the agenda of the Iranian delegation.
Iran’s industry minister Mohammad Reza Nematzadeh, speaking at a Franco-Iranian business forum, said there were no longer obstacles to keep French banks from doing business with Iran.
“If they don’t get active, there will be no increase in business,” he warned.
Nematzadeh said international banks only needed to respect three conditions to avoid falling foul of U.S. sanctions: not do work through a U.S. branch, avoid doing business with persons and entities on the sanction list, and not clear transactions via the United States.
“These three conditions are very clear. Please take this seriously, from our side things have started,” he said. “If the banks don’t start, we are just wasting our time.”
BNP Paribas declined to comment. Societe Generale was not immediately available.
Senior French bankers said the memory of BNP Paribas’ fine remained too fresh and the current sanctions framework, with a possibility to snap them back in place, was off-putting.
“Big banks got really smacked down, so they won’t come back without seeing how things go for while,” Cyrus Mobasher, an Iran-based consultant, told Reuters.
However, smaller banks such as Natixis (CNAT.PA) may be more willing to do business with Tehran, he said.
Businessmen hope French export-credit insurer Coface (COFA.PA) could also help get things moving.
Coface signed a deal with Iran on Thursday, the French president’s office said. Nematzadeh said it was a major step, but no details were immediately available.
“It’s crucial that Coface comes back, I hope it will take effect rather soon,” Mobasher said. “Our competitors are the Italians and the Germans, which have similar arrangements. The Chinese are not positioned on the same products.”
But Josiane Galippe, head of development and international at Banque SBA, a unit of Banque Libano-Francaise, said it was still too early to engage with Iran.
“There are still many products that remain under sanctions for the moment, sanctions have only partially been lifted,” she said.
“When you hear them speak today, it’s like everything is open for business. But so far it’s still just talk, things have not started in practice.”
Meanwhile, the French and Iranian central banks have formally re-established ties to allow Iranian banks to handle business with France, French Economy Minister Emmanuel Macron said.
Additional reporting by Maya Nikolaeva; Editing by Leigh Thomas and Mark Potter