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Euro banks ready to do business with Iran, but fear US lingering sanctions
EUROPEAN companies flocking back to Iran are doing so without their favoured lenders as banks shy away in fear of running afoul of remaining US sanctions.
BNP Paribas SA agreed was fined US$9 billion for dealings with Iran, and many European banks remain unwilling to go anywhere near Iran-related business.
That means Chinese and Persian Gulf lenders, as well as European institutions such as Belgium's KBC Groep NV, have moved in to take up the slack.
The reluctance adds a complication for manufacturers from Airbus Group SE to PSA Group, the maker of Peugeot cars, as they seek to capitalise on growth in Iran.
The funding issue has become a financial diplomatic hot spot. In France, the government, worried that companies may lose exports, has started talks with the US Treasury's Office of Foreign Assets Control to get a commitment that banks can do business without incurring legal woes, two people with knowledge of the matter said.
"Banks want the maximum certainty," said Tanguy Coatmellec, a Dubai-based partner at Ernst & Young's financial-services advisory group.
"A big part of the risk is really the US political position over the long term. Either financing methods will be found or these contracts won't be finalised," said Mr Coatmellec.
France's Societe Generale, Germany's Deutsche Bank, Zurich-based Credit Suisse, ING Groep and the UK's Standard Chartered are among the big European banks that say they're generally not prepared to do business in Iran yet.
The US, Russia and European countries in January lifted a series of economic sanctions in exchange for Iran's agreement to curb its nuclear activities.
Still, significant restrictions remain on Iran to combat terrorism support, human rights abuses and ballistic-missile development. A crucial ban remains on dollar-denominated trades related to Iran, scaring away most large European banks.
Iranian officials are pushing the US to reassure banks on doing business with Iran. Iranian Central Bank Governor Valiollah Seif told Bloomberg Television last month that the US. IRISL ranking
BNP Paribas SA agreed was fined US$9 billion for dealings with Iran, and many European banks remain unwilling to go anywhere near Iran-related business.
That means Chinese and Persian Gulf lenders, as well as European institutions such as Belgium's KBC Groep NV, have moved in to take up the slack.
The reluctance adds a complication for manufacturers from Airbus Group SE to PSA Group, the maker of Peugeot cars, as they seek to capitalise on growth in Iran.
The funding issue has become a financial diplomatic hot spot. In France, the government, worried that companies may lose exports, has started talks with the US Treasury's Office of Foreign Assets Control to get a commitment that banks can do business without incurring legal woes, two people with knowledge of the matter said.
"Banks want the maximum certainty," said Tanguy Coatmellec, a Dubai-based partner at Ernst & Young's financial-services advisory group.
"A big part of the risk is really the US political position over the long term. Either financing methods will be found or these contracts won't be finalised," said Mr Coatmellec.
France's Societe Generale, Germany's Deutsche Bank, Zurich-based Credit Suisse, ING Groep and the UK's Standard Chartered are among the big European banks that say they're generally not prepared to do business in Iran yet.
The US, Russia and European countries in January lifted a series of economic sanctions in exchange for Iran's agreement to curb its nuclear activities.
Still, significant restrictions remain on Iran to combat terrorism support, human rights abuses and ballistic-missile development. A crucial ban remains on dollar-denominated trades related to Iran, scaring away most large European banks.
Iranian officials are pushing the US to reassure banks on doing business with Iran. Iranian Central Bank Governor Valiollah Seif told Bloomberg Television last month that the US. IRISL ranking
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