Thursday, May 26, 2016

Eye on Iran: Iran's Oil Deals Hit Banking Snag








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WSJ: "Even after the lifting of international sanctions against Iran, long-standing U.S. banking limitations are impeding the country's oil resurgence by forcing energy companies to use small lenders or barter to get their deals done. France's Total SA in February had to arrange payments through three smaller European banks to ship the first exports of Iranian crude to Europe in years, said Mohsen Ghamsari, the director in charge of marketing oil at the National Iranian Oil Co. These banks do little business in the U.S., making them less likely to run afoul of U.S. restrictions. Before international banking sanctions, which started around 2006, Total often used giant French bank BNP Paribas SA for project finance and oil shipments in Iran, according to people familiar with the matter. A BNP representative said the bank is wary of doing business in Iran after getting hit with an $8.9 billion fine for breaching American sanctions last year... The smaller banks that Mr. Ghamsari said Total used-Germany's Europäisch-Iranische Handelsbank AG, Switzerland's Banque de Commerce et de Placements and Turkey's Halk Bankası-don't do much business in the U.S.-if any... Royal Dutch Shell PLC and BP PLC, which declined to comment, have yet to buy Iranian oil because their banks refuse to deal with the Islamic Republic, Mr. Ghamsari said. After running into banking hurdles, some European companies are setting up complex bartering arrangements to buy Iranian petrochemicals-bypassing the Western banking system altogether-said Ali Mohammad Bossaghzadeh, the director of production control at Iran's state-run National Petrochemical Co." http://t.uani.com/27TTCxf

Reuters: "Obama administration officials told U.S. lawmakers on Wednesday they would oppose new sanctions on Iran if they interfere with last year's international nuclear agreement, laying the groundwork for a potential fight over any legislation. 'If legislation were to undermine the deal, by taking off the table commitments that we had put on the table, that would be a problem,' Adam Szubin, the acting Treasury Department undersecretary for terrorism and financial intelligence, told a House of Representatives hearing. 'Certainly our allies around the world would see us taking back major chunks of the sanctions relief as bad faith,' Szubin told a Senate Banking Committee hearing later on Wednesday. House and Senate members are drafting new sanctions measures, accusing Iran of supporting terrorism, human rights abuses and violating its international commitments by testing ballistic missiles. They want to renew the Iran Sanctions Act, a broad U.S. law imposing sanctions over Iran's nuclear and missile programs that expires at the end of 2016. Administration officials have urged Congress not to rush to renew the ISA. Lawmakers argue that new sanctions will help send a message that Washington will take a hard line, despite the nuclear pact. Every Republican in Congress and several of President Barack Obama's fellow Democrats opposed the agreement. 'I feel it's not so terrible to have Congress come up with new sanctions if we feel Iran is violating its agreements,' said Representative Eliot Engel, top Democrat on the House Foreign Affairs Committee, who opposed the nuclear pact." http://t.uani.com/1scFNcI

Bloomberg: "Saudi Arabia couldn't stop the Iran nuclear deal from being signed. Plan B is to limit Iran's ability to reap its benefits. The kingdom is mobilizing its Gulf allies to make sure that, more than four months after the lifting of sanctions on the Islamic Republic, Iran's opening-up to the global economy doesn't go smoothly. Last month the Saudis scuttled a bid to stabilize crude prices because it would have allowed their bitter foe to grab a larger share of oil markets. And in Dubai, once their main gateway to the world, Iranian businessmen privately complain of increasing restrictions. It's a rearguard action by the Saudis as the U.S. reassesses its role in the Middle East and investors are drawn to the allure of Iran as the world's last untapped major frontier market. Still, there are other drags on doing business with Iran that play into the Saudi effort: European banks are still reluctant to do business in the Islamic Republic for fear of possible U.S. sanctions." http://t.uani.com/1XzA50h

U.S.-Iran Relations

Reuters: "Iran's Supreme Leader Ayatollah Ali Khamenei called for vigilance against what he called a 'soft war' mounted by the West and aimed at weakening the clerical establishment, state television reported on Thursday... 'Our officials and all parts of the establishment should be vigilant about the West's continued soft war against Iran...the enemies want to weaken the system from inside,' Khamenei said. In a meeting with members of the Assembly of Experts, with authority to appoint and dismiss the supreme Leader, Khamenei told Iranian officials: 'By impairing centers of powers in Iran, it will be easy to harm the establishment from inside.' ... 'The only way to materialize the (1979 Islamic) revolution's goals is national unity and not to obey the enemy,' he said... 'Iran's enemies try to influence decision-making centers, alter Iranian officials' positions and change people's beliefs,' Khamenei said. 'We should be strong and empowered.'" http://t.uani.com/27TTE8a

Congressional Action

AP: "The House voted Wednesday to bar the U.S. government from future purchases of heavy water from Iran, undercutting the controversial nuclear pact with that nation and earning a certain veto threat on a key government funding bill. Wednesday night's 251-168 vote came on an amendment by Florida GOP Rep. Ron DeSantis to a funding bill for the Energy Department. A similar amendment died in the Senate after a major dust-up earlier this year, when Democrats filibustered a companion proposal by freshman Sen. Tom Cotton, R-Ark. Last month, the Obama administration completed an $8.6 million deal to buy 32 tons of heavy water from Iran. The amendment wouldn't affect that deal but would thwart purchases next year. Nonetheless, the White House has weighed in strongly with a veto promise that may get the proposal removed during House-Senate negotiations." http://t.uani.com/1TLANpN

The Hill: "Senate Republicans are linking a battle over Iran sanctions to a wide-ranging defense policy bill. Sen. Kelly Ayotte-backed by 18 other Republican senators-has filed an amendment to the National Defense Authorization Act (NDAA) to expand sanctions on Iran's ballistic missile program and individuals who support it. Ayotte's amendments would also extend the Iran Sanctions Act, currently set to expire at the end of the year, though 2031... Sens. Bob Corker (R-Tenn.) and Ben Cardin (D-Md.), the top members of the Foreign Relations Committee, have been working on sanctions legislation for months targeting Iran's ballistic missile program and extending the Iran Sanctions Act. Sen. John Cornyn (R-Texas), the Senate's No. 2 Republican, has also filed an amendment to sanction individuals involved with an incident in which Iran boarded U.S. ships and held American sailors earlier this year. The incident sparked outrage from lawmakers, ahead of President Obama's final State of the Union... Sen. Marco Rubio (R-Fla.) also wants to block the Defense Department from entering into contracts with individuals who support currently sanctioned Iranians or are connected to the Iran Revolutionary Guards." http://t.uani.com/1TDizbX

CNN: "The Iran nuclear deal is being fully implemented, according to Obama administration officials who told skeptical lawmakers Wednesday that they'll continue to sanction Tehran for its missile tests, support for terrorism and human rights violations. Treasury and State Department officials said that the Joint Comprehensive Plan of Action, the July 2015 nuclear deal reached between Iran, the U.S. and its allies, has extended the time it would take Tehran to get a nuclear weapon, enhancing U.S. security and that of its allies in Europe and the Middle East. But they spent the bulk of a House Foreign Affairs Committee hearing reassuring Republican and Democratic lawmakers who questioned how aggressively the Obama administration is penalizing Iran for its destabilizing activities in the Middle East and how strictly it is enforcing the deal. 'We need to make sure it's implemented to the letter,' said New York Democratic Rep. Eliot Engel, 'and hold Iran's feet to the fire with respect to' what he called its troublemaking in the region." http://t.uani.com/22qnYDm

Free Beacon: "Rep. Brad Sherman (D., Calif.) heaped criticism on the Iranian nuclear deal during a Wednesday hearing of the House Foreign Affairs Committee, calling for more sanctions on Iran to punish its military involvement in Syria. Sherman has been one of the most vocal Democratic dissenters from the Obama administration's diplomatic agreement with Iran... 'This House was divided on the Iran deal, but we were united in one thing, sanctions work and Mr. Zubin, and thanks to you and your predecessors, you proved they work by working hard to make sure that they work,' Sherman said. 'Some believe that the sanctions got us a good deal, some believe the sanctions would have gotten us a better deal, the only agreement was sanctions work. And I join with the ranking member (Rep. Eliot Engel [D., N.Y.]) in saying that we ought to have new sanctions and Ambassador Mull, thank you for clarifying that that will happen.'" http://t.uani.com/1sRB54P

Business Risk

Reuters: "Shares in Turkey's state-run Halkbank fell more than 3 percent on Thursday over concern about developments in a case brought by U.S. prosecutors against a Turkish-Iranian businessman. U.S. prosecutors late on Wednesday opposed gold trader Reza Zarrab's request to be released from custody on bail while he awaits trial for conspiring to violate U.S. sanctions against Iran, saying his wealth makes him a flight risk. Prosecutors pointed to Zarrab's 2013 arrest in Turkey on charges that he bribed high-level officials to facilitate transactions benefiting Iran. Halkbank's general manager at the time was also accused but not charged in the 2013 Turkish investigation, which was later dropped." http://t.uani.com/1P0gIfd

AP: "An Instagram account associated with a powerful general who leads an elite unit of Iran's Revolutionary Guard briefly was inaccessible on the application. The account featuring images of Gen. Qassem Soleimani, who heads the elite Quds Force focusing on foreign operations, was inaccessible Wednesday, then later restored. It's unclear whether the account, followed by some 300,000 users, is managed on Soleimani's behalf. Iran's semi-official Fars news agency described it as belonging to him. A website associated with Iranian state television also reported on the account's disappearance. Instagram, which is owned by Facebook, did not immediately respond to a request for comment." http://t.uani.com/1WmqAlV

Sanctions Enforcement

AP: "A Turkish celebrity who lived the high life as he enabled Iran to overcome U.S. sanctions and deceive the United States and the international banking system for years is a flight risk and shouldn't get bail, prosecutors said Wednesday. In papers filed in Manhattan federal court, prosecutors said Reza Zarrab, 32, had vast assets that could be used to flee to avoid the likely decades in prison he will face if convicted of criminal charges that resulted in his March arrest in Miami... In arguing against bail, prosecutors described Zarrab as a 'sophisticated, well-connected, international businessman with immense wealth and influence.' They said he is charged with aiding Iran in its deception of the United States and the international banking system from 2010 to 2015, enabling millions of dollars to pass through. Other charges include bank fraud and money laundering." http://t.uani.com/25jTlBn

Sanctions Relief

Reuters: "German exports to Iran, especially of machines and equipment, rose significantly in the first quarter following the removal of international sanctions against the Islamic Republic, government data showed on Thursday. Exports to Iran surged by 7 percent year-on-year in the January-March period to 500 million euros (380 million pounds), the Federal Statistics Office said. This compares with a 0.7 percent rise in overall, year-on-year German exports in the same period. 'This is quite reasonable,' said Michael Tockuss, head of the German-Iranian Chamber of Commerce. 'Machines and equipment are doing exceptionally well, but also grain and wheat.' For decades before sanctions were imposed, Germany was Iran's biggest trading partner... German industry anticipated a steep rise in exports to Iran after world powers lifted crippling sanctions against the Islamic Republic in January in return for Tehran's compliance with a deal to curb its nuclear ambitions. However, Tockuss said great expectations arising from the nuclear deal have been dampened by difficulties in financing as Western banks remain reluctant to do business in Iran for fear of transparency issues that could lead to fines... 'The whole big euphoria that existed a few months ago has evaporated a little bit,' said Tockuss. 'This is mainly because of the big difficulties with financing.' He added that Iran had shown interest in large-scale projects to build refineries and petrochemical factories and cement plants, but was unable to finance such undertakings with credit from foreign banks. 'Its own banks lack liquidity. They are dependent on our banks to finance projects,' Tockuss said. Despite such difficulties, he said, Germany should expect business with Iran to outperform activity with most other emerging markets. German exports to Iran could reach 2.5-3 billion euros this year, up from 2 billion euros in 2015, he added." http://t.uani.com/1TDfN6A

Tehran Times: "Christian Benger, the regional minister of Austrian state of Carinthia for economy, agriculture and tourism, says there is high know-how technology in the fields of solar and other green energy resources as well as water management in Austria and the country is keen to help Iran in these areas. In an interview with the Tehran Times, Benger said, 'There is also high know-how in Austria for recycling plastics. You have petrochemical industry and we have technology to recycle your products, so a lot of opportunities we can develop.' The interview came on the sidelines of a meeting between Benger, heading a high-ranking trade delegation, and Masoud Khansari, the chairman of Tehran Chamber of Commerce, Industries, Mines and Agriculture, in Tehran on Wednesday. The Austrian minister mentioned problems with the banks and money transfer as the main downside for business in Iran, while noting, 'I think this will be solved in the very near future.' Austrian banks help remove this obstacle, Benger said, adding, 'Raiffeisen Bank is one of the main Austrian banks in the international business. It's the Austrian control bank, which controls every international money transfer. This bank and all other banks are active and support resolving this problem. So, solutions will be seen in the near future.'" http://t.uani.com/1sAMbul

Press TV (Iran): "A senior Iranian trade official says Austria's Oberbank and Raiffeisen Bank International (RBI) are now connected to Iranian banks. Tehran Chamber of Commerce Chairman Masoud Khansari said that the two Austrian banks have started opening letters of credit (LCs) for Iranian businesses, facilitating trade transactions between the two countries. He announced the news in Tehran on Wednesday on the sidelines of a meeting between Tehran Chamber of Commerce and a trade delegation from the state of Carinthia in southernmost Austria, headed by Christian Benger, the regional minister for economy, agriculture and tourism... Oberbank is an independent regional bank located in the heart of Europe and headquartered in Linz in the north-center of Austria and Raiffeisen Bank International is the central and the largest institution of the Raiffeisen Banking Group." http://t.uani.com/1qLGngi

Reuters: "China's National Transportation Equipment & Engineering Co is close to agreeing with Tehran on a $3 billion railway project to connect the capital with the northeastern holy city of Mashhad, a Chinese source familiar with the talks told Reuters." http://t.uani.com/27TUyl9

Terrorism

Asharq Al-Awsat: "Iran decided to provide fixed financial support to the Palestinian Jihad Islamic Movement, has visited Tehran in April, Palestinian sources close to the movement stated. The PIJ delegation was headed by its Secretary General Ramadan Shalah and included his assistants Ziad Nakhleh and military official of the movement Akram Ajuri. It held several public meetings with Iranian leaderships and other private meetings with the Commander of the Iranian National Guard and Commander of the Quds Force Qassem Soleimani. The parties discussed various files that elaborated the Iranian vision for the PIJ Movement in the coming years. One of the major decisions taken by Qassem Soleimani and approved by the political and military offices of the Movement, according to the sources, was restructuring al-Quds Brigades, the armed wing of the PIJ, and assigning Khaled Mansour the general commander of the Brigades in Gazza Strip. Notably, Mansour is considered to be one of the most prominent leaders who are close to Iran and is respected and honored by the PIJ Movement. Soleimani also ordered allocating $70 million as an annual budget for the Quds Brigades, transferred from the Iranian Revolutionary Guard's treasury. Tehran pledged funding the movement consistently after a hiatus for two years." http://t.uani.com/1P0keGk

Bloomberg: "The Afghan Taliban said its former leader traveled frequently to the Middle East from Pakistan over the past decade to raise funds for an insurgency against U.S.-led forces, highlighting the ease with which the group was able to move around the region. Mullah Akhtar Mohammad Mansour, who was killed in a U.S. drone strike on Saturday, used a Pakistani passport to visit the United Arab Emirates, Zabihullah Mujahed, the Taliban's main spokesman, said by phone. Mansour had been on a United Nations no-fly list since 2001. 'He held meetings with Afghan businessmen and Islamic nations in the U.A.E. to discuss our Afghan holy war and raise funds for Taliban operations in Western-occupied Afghanistan,' Mujahed said. He added that Mansour also traveled to neighboring Iran on 'unofficial trips.' ... 'Ongoing battle obligations' obliged Mansour to visit areas in Iran near its borders with Afghanistan and Pakistan, according to Mujahed, the Taliban spokesman... Mansour's death is a major blow to Pakistan and possibly also Iran, which may have forged links with the Taliban to undercut U.S. interests in the region, according to Waheed Muzhda, a former Foreign Ministry official in the Taliban regime who is now a political analyst in Kabul. 'Iran has always opposed the U.S. presence in Afghanistan,' Muzhda said. 'Iran may also have been behind the curtain to stab the U.S. in the back using Taliban militants.'" http://t.uani.com/22qmQ2N

Domestic Politics

Reuters: "Long used to lucrative state contracts, Iran's biggest construction company faces leaner times, as overseas firms better able to attract financing push for orders in an economy trying to open to the world after years of sanctions. The misfortunes of Khatam al Anbia Construction Headquarters (KAA) are an unwelcome novelty for its powerful owners, the Revolutionary Guards, a military unit created by the Islamic Republic's founder Ayatollah Ruhollah Khomeini which also secured an economic foothold after the 1980s Iran-Iraq war. The conglomerate came to dominate the building sector under the presidency of Mahmoud Ahmadinejad between 2005 and 2013, winning billions of dollars of state contracts for oil and gas facilities, roads and dams. The Guards have not hesitated to make their displeasure public. 'The Islamic Revolutionary Guards Corps has huge potential in construction fields,' Tasnim news agency quoted Guards chief Mohammad Ali Jafari as saying in March. 'Unfortunately, the government has not welcomed its (project) suggestions and activities.' KAA chief Ebadallah Abdollahi, who as a Guards commander often wears military uniform, said this month that one million people were working on the company's projects. But KAA's dominance looks likely to fade as President Hassan Rouhani's administration draws up plans for huge infrastructure projects to jump-start the economy after international sanctions over Iran's nuclear program were removed in January, industry executives and analysts say. Instead of enlisting KAA, the government is turning to foreign firms to discuss contracts for the projects partly because, with its budget strained by low oil prices and damage from the sanctions, it wants financial support from abroad." http://t.uani.com/27TUyl9

Opinion & Analysis

Business Standard (India) Editorial: "Prime Minister Narendra Modi has received some unsolicited advice on his two-day Iran visit from an unlikely source: one-time Democratic Party vice-presidential candidate Joe Lieberman. The maverick former Senator, who has repudiated much of his earlier liberalism in favour of a hawkish foreign policy outlook, now chairs an organisation called United Against Nuclear Iran that opposes closer ties with the country that had labelled the US 'The Great Satan' for decades. In this capacity, Lieberman has taken it upon himself to issue a press release warning Modi of the risks of doing business with Iran because it sponsors Hamas and Hezbollah. 'Prime Minister Modi has a special opportunity to focus his efforts on pressuring Iran to halt its destabilising and provocative behaviour, rather than prematurely rewarding the regime with lucrative business opportunities,' the press release quotes Lieberman as saying. He seems to be unaware that India did business with Iran even when the US-led sanctions regime was in place." http://t.uani.com/1OPkkeI
       

Eye on Iran is a periodic news summary from United Against Nuclear Iran (UANI) a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Eye on Iran is not intended as a comprehensive media clips summary but rather a selection of media elements with discreet analysis in a PDA friendly format. For more information please email Press@UnitedAgainstNuclearIran.com

United Against Nuclear Iran (UANI) is a non-partisan, broad-based coalition that is united in a commitment to prevent Iran from fulfilling its ambition to become a regional super-power possessing nuclear weapons.  UANI is an issue-based coalition in which each coalition member will have its own interests as well as the collective goal of advancing an Iran free of nuclear weapons.

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