LONDON: Britain is working with its European partners to help ease the impact of banking restrictions on trade with Iran, Business Secretary Sajid Javid said Wednesday, adding that the U.K. had signed a deal to simplify the financing of exports. International sanctions, including banking restrictions, imposed on Iran ended in January under a deal with world powers in which Tehran agreed to curb its nuclear program.
But U.S. measures including a ban on dollar trading and a freeze on U.S. banks engaging in trade remain in place. This has left non-U.S. banks wary of processing transactions with Iran, fearing they may still fall foul of the existing measures and a lack of clarity on what they are able to do.
Javid told a conference in London that issues around cash and credit were “quite significant” but Britain was working with other European nations and the banking industry to try to tackle them or provide clarity on how the guidelines work.
“For many firms it’s not actually clear what you can or cannot do according to, let’s say, U.S. rules. That’s why one of the things that as a minimum has to be done quite quickly is to bring some clarity.”
U.K.’s export agency and its Iranian counterpart signed a memorandum of understanding Wednesday.
“The two organizations have committed to promoting the financing of contracts and projects involving exports between our nations.”
The deal will see U.K. Export Finance and the Export Guarantee Fund of Iran, the Iranian state-owned credit insurance company, work together to identify opportunities for trade in capital goods, equipment and services, Britain’s business ministry said.
UKEF, which provides guarantees to banks and insurance to support British exporters, suspended cover to Iran in 2012 after the imposition of tougher financial sanctions. That cover was restored after the conclusion of the nuclear deal with Iran.
Other European Union countries including Italy, France and Germany have already struck billions of dollars worth of deals and many within Britain’s business community complain that the country has been slower to respond.
Shrugging aside such concerns, Javid said “It’s never too late.” He added that he would lead a British trade mission to Iran later this year, possibly as early as May.
Javid said membership of the European Union had been helpful in terms of facilitating the removal of sanctions, but added that Britain’s June 23 referendum on whether to remain a member of the 28-nation bloc was not a risk to future trade with Iran.