ISLAMABAD: The Pakistani banks are reluctant to get involved in financial transactions with Iranian banks due to UN sanctions on Iran.
This situation is proving a major hurdle in the way of both countries’ resolve to increase the volume of bilateral trade to $5 billion per annum from $270 million in next five year.
Sources at the Ministry of Commerce told Customs Today that trade relations between Pakistan and Iran were healthy and involved several commodities before the imposition of UN sanctions on Iran.
“Even in the recently gone Fiscal Year 2015-16, Pakistan exported goods worth $31.45 million while the imports stood at $0. 27 million and trade balance is favourable for Pakistan with trade surplus of $31.18 million in FY 2016. But the overall trade volume is very low which requires special attention” the source added.
However, another source at Finance Ministry further disclosed that both the Pakistani and Iranian banks were trying to find out a third party option to facilitate bilateral trade.
In this regard, a Dubai based channel for financial transactions is being explored. The option of opening up a branch of both Pakistani and Iranian banks in Dubai is also under discussion” the source noted.
However, the source said that both sides were holding extensive deliberations to finalize modalities for funds transfer of the traders and businessmen.
The source said that a director level delegation of the State Bank of Pakistan (SBP) undertook a trip to Tehran some two weeks ago and held detailed discussions with Iranian authorities on this issue.
The source observed that the UN economic sanctions on Iran regarding their nuclear program generally affected Pakistan’s industrial sector. The fruit industry of Pakistan have reportedly lost a lucrative market in Iran, where at least 30,000 tons of mango were exported previously, as a result of the trade embargo imposed by the United Nations on Tehran.
“According to the statistics by Pakistan, the fruit industry and the exporters could not export around $10 million worth of mango during the current season” the source maintained saying tht the Ministry of Commerce (MoC) had been in direct contact with the US Department of Agriculture to resolve the issue through diplomatic channels.
