By Andrei Skvarsky.
A London lawyer has suggested that European Union governments pilot European banks through a grey area that makes them afraid of moving into the Iranian market despite the United States’ lifting of nuclear programme-related sanctions against Iran in January.
Azadeh Meskarian of London-based solicitor firm Zaiwalla & Co. suggests in an article that Western officials follow in the footsteps of British Prime Minister David Cameron, who stepped in after Barclays Bank declined to process a transaction between a British company and an Iranian firm in the fear of US reprisals.
Cameron told Barclays its stance ran against the policy of the British government and pressed the bank to go ahead with the deal.
The sanctions lifted by the United States in January 2016 in compliance with the July 2015 international deal on Iran are known as “secondary sanctions” and were imposed between 2009 and 2012.
The “primary sanctions”, slapped on Iran by Washington during the Iranian revolution of 1979 and barring US companies and individuals from trading with the country, remain in place.
British magazine The Week says this “creates a grey area for banks with a US presence”.
Some banks, including HSBC, Deutsche Bank, Standard Chartered and BNP Paribas, have been fined over the past few years for violating anti-Iranian sanctions.
“Perhaps words of assurance and comfort from the relevant authorities such as HM Treasury in the UK or OFAC [the Office of Foreign Assets Control] in the US could assist in building up the necessary level of confidence for banks and financial institutions to return to the Iranian market,” Meskarian says in her article, headlined “Europe’s big banks need reassurance on re-entering Iran”.
“An example of this is words of assurance by PM David Cameron to Barclays Bank over its refusal to facilitate trade deals with companies in Iran despite the lifting of international sanctions.”
It is unclear, though, how far Cameron has been able to get.
The European Sanctions blog (europeansanctions.com), which specialises in EU sanctions law developments, quoted Barclays as saying in a reply that there was “a considerable divergence in both approach and intention between the EU…and the US, where primary sanctions remain in place”, and that “as we offer banking services through our US operations we are required to continue to restrict business activity with Iran”.
The same blog quoted the chief executive of the British Bankers’ Association, Anthony Browne, as saying in January that “international banks are likely to need considerably more clarity from US authorities… before engaging with Iran”.
Zaiwalla & Co. gained a great deal of prominence by legal victories that cleared Bank Mellat, Iran’s largest private lender, from sanctions imposed on it by the British Treasury and the EU.
The firm is now going to sue the Treasury for $4bn as damages inflicted on the bank, and is considering a damages suit against the European Council.
Founded in 1982 by Sarosh Zaiwalla, the first Asian to establish a law firm in the City of London, Zaiwalla and Co. has been involved in more than 1,200 international litigations and arbitrations.
Zaiwalla is an international team with experts on the law of Russia, the Commonwealth of Independent States, China, India, the Middle East and Iran.
Its specialist areas include international commercial arbitration, shipping, banking, project finance, energy and immigration.
One of the presidents of India, India’s Gandhi family, and the governments of China and Iran have been among its clients.