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Austria’s OeKB raises Iran export financing

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)
OeKB’s export insurance cover for exports to Iran has increased to 1 billion euros from 280 million euros.

The Central Bank of the Islamic Republic of Iran (CBI) says Austrian export credit agency OeKB has raised its cover for Iran transactions to 1 billion euros, the Mehr news agency reports.

The announcement by Austrian Minister for Finance Hans Jörg Schelling came during a meeting with CBI Governor Valiollah Seif in Vienna, the report said.

“In the meeting, it was announced that OeKB’s insurance cover for exports to Iran has increased to 1 billion euros from 280 million euros,” Mehr said, citing a CBI statement.

Schelling also said his country is interested in “completing banking relationship” with Iran and taking measures to remove existing obstacles on its way, besides forging brokerage ties with Iranian banks, it added.

Austrian companies became the first Western firms to put down concrete stakes in the Islamic Republic when Tehran reached a nuclear accord, signing a number of agreements with Iranian partners in September 2015.

Raiffeisen Bank and Erste Bank from Austria along with banks from Italy, Switzerland, Germany, Turkey and Belgium have set up shop in Iran, handling transactions with the energy-rich country while major banks have stayed away.

Iranian President Hassan Rouhani (R) welcomes Austrian President Heinz Fischer during a visit to Tehran in September 2015.

However, these small banks lack the resources to finance big projects like Iran Air’s deal with Airbus and Boeing for purchase of about 200 aircraft or oil and gas development schemes. 

Months after nuclear sanctions on Iran were supposed to have ended, Iran’s banking transactions worldwide are still facing problems, with foreign banks shying away from processing transfers to the country.

Iran says confusing signals from the US create a long doubt about the legality of doing business with the Islamic Republic. Western banks acknowledge avoiding dealings with Iran due to fears of being punished by the US government.

Iran’s continued problems accessing the international financial system which severely limits the ability of Iranian banks to move money freely around the world have eroded Iranians’ trust in further rapprochement with the West.

Head of Iran’s atomic energy agency said on Monday that the nuclear agreement could be in jeopardy if the promised sanctions relief by the West does not materialize.

President Hassan Rouhani, who prides himself on engineering the nuclear agreement, went out of his way to criticize it during an address to the UN General Assembly in New York this month.

“As one thing they (the Americans) say ‘you are free to engage with Iran in banking activity'. At other times, they … enter the arena with threats. They frighten the big banks,” he said.

On Tuesday, Seif said US threats are discouraging banks from doing business with Iran.

“The US is even scaring banks away from dealing with Iran whereas it should have done the opposite based on what it has signed,” he told national television IRIB.

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