TEHRAN: Iran has asked the Bank of England to set up special clearing accounts for its banks, but has so far been rebuffed in its effort to resolve an impasse that has left it excluded from banking in London more than a year after sanctions were lifted. Tehran has been hoping for swift reintegration into global trade after its deal in 2015 aimed at curbing Tehran’s nuclear program in return for the lifting of international sanctions. Its failure to persuade Western banks to accept its business has been one of the main choke points preventing its rehabilitation.
Banking sources from both Iran and the West, and Iranian political sources close to the talks, said Tehran has approached the Bank of England to seek clearing accounts directly with the UK central bank. Such accounts, for Iran’s own Central Bank or for the British subsidiaries of Iranian banks, would allow them to make and receive payments in sterling, business so far rejected by commercial banks. “That would send a huge message to the market. What commercial bank is practically going to stop Bank of England payments? None,” said one Western source. However, the sources said the BoE seems uninterested in resolving the problem for now. “The Bank of England has proved resistant to intervening in any kind of positive way in order to assist trade between Iran and UK,” said the Western source. A senior Iranian banking official in Tehran said: “The Bank of England has suspended anything related to Iran, even the latest scheduled meeting was canceled. Everything has been put on hold.” A Bank of England spokesman declined to comment. Iran’s Central Bank officials were not available to comment. The sources all spoke on condition of anonymity as talks between Iran and the bank have not officially been made public. Although EU and United Nations sanctions over Iran’s nuclear program were lifted a year ago, the United States still has separate measures in place over Iran’s missile program, and the new U.S. administration has promised a hard line.
The risk of falling afoul of U.S. measures has been enough to persuade Western banks to steer clear, including in London, where Iran is particularly keen for a presence in the main global financial center outside of the United States. Even Iran’s embassy in London has so far been unable to open a British bank account. Three Iranian banks have subsidiaries with licenses to operate in Britain: Melli Bank Plc, Bank Sepah International Plc and Persia International Bank Plc. But none has been able to persuade a commercial bank to clear its payments in sterling, the British currency.