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Iran nuclear accord means little to US

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
The US Treasury Department’s Office of Foreign Assets Control (OFAC) says the primary embargo on Iran is still in place.

The US administration is preventing the country’s banks from doing business with Iran despite the lifting of sanctions on the Islamic Republic. 

Washington says it has eased “secondary” sanctions targeting companies outside the US and Americans seeking certain businesses in Iran but most “primary” sanctions related to terrorism and rights accusations remain in place.

“Broadly, the US primary embargo on Iran is still in place,” John Smith, acting director of the Treasury Department’s Office of Foreign Assets Control (OFAC), told a congressional panel on Thursday.

That means the opening with Iran following the implementation of the nuclear accord “does not have any impact on us,” the AFP news agency quoted an official with one large New York bank as saying.

“We’re still very prohibited from engaging in just about any business activity with Iran except on very limited exceptions,” the official added.

US banks interested

According to AFP, several leading US banks, including Bank of America, JPMorgan Chase, Goldman Sachs and Morgan Stanley, are keen to enter the Iranian market.

They have reportedly turned to teams of lawyers and other specialists as they plumb the shifting legal terrain.

“We continue to monitor the developments in Iran,” Citigroup spokesman Kamran Mumtaz told the French news agency.

Several leading US banks are keen to enter the Iranian market, AFP says.

According to OFAC, all foreign banks operating in the US are forbidden from clearing US dollar-denominated transactions involving Iran through US banks.

Smith said non-US companies who provide support to Iranian entities “may face being cut off from the US financial system.”

Iranian officials say the Central Bank of Iran (CBI) has decided to carry out all foreign trade in euros to avoid any complications.

Meanwhile, non-US banks that work in both Iran and the US are reportedly isolating Iranian business from their US assets to avoid possible American punishments.

The US government has also freed banks to make loans in some specific businesses and activities involving Iran such as sales of airplane parts.

Banks can further provide financing to US companies that import Iranian foods or carpets, pistachio nuts and caviar.

However, the nuclear accord still faces threats from US presidential candidates who have pledged to undo it after President Barack Obama is gone.

‘Business as normal’

Those threats have only harmed American entities which are blocked from joining a rush by non-US companies to cash in on trade opportunities in Iran.

On Monday, the world’s largest independent oil trader Vitol Group said it’s "business as normal" with Iran after the end of economic sanctions.

Austria’s Raiffeisen Bank International (RBI) also said it wanted to open a branch in Tehran “as quickly as possible,” becoming the first foreign lender to set up shop in Iran after the lifting of sanctions.

Major companies from Asia to Europe are rushing to resurrect trade with the global energy superpower which sits on the worlds’ biggest oil and gas reserves combined as well as massive mineral deposits.

Italy and France signed initial deals worth more than $40 billion in a variety of fields -- from oil and gas to car manufacturing, construction, health and agriculture and clean energy development -- last month during President Hassan Rouhani’s visit to Europe.

Seeking to reassure, Paris unveiled an accord offering state guarantees to back French investments in Iran through credit management firm Coface in order to cover onsite non-payment risks.

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