Page 35 - IRANRptMay21

lifeline’
Iran says US bank sanctions aim to “blow up” its remaining channels to pay for food, medicine
data and interviews with bankers, Western diplomats and officials.
It said diplomatic correspondence showed move came at a time that Germany, France and the UK were urging the Trump administration in late October to reconsider broad, new sanctions against Iran’s banks, contending that the move would deter legitimate humanitarian trade and hurt the allies’ common interests.
The US on October 8 hit 18 Iranian banks with new sanctions as it stepped up its “maximum pressure” campaign on Tehran. Americans were barred from further dealing with the Iranian banks and secondary sanctions were extended to target foreign companies that did business with the sanctioned lenders. For foreign banks, violations could mean losing access to the US market and hefty penalties.
In their joint letter, dated October 26, diplomats from the three European nations, known as the E3, reportedly told Washington that the sanctions could make food and medicine “prohibitively expensive” for ordinary Iranians in the middle of the pandemic.
“The US has always said that its aim was to target the ruling elite and not the Iranian population,” according to the letter, a copy of which was seen by Reuters. “In our view it is important to uphold this undertaking in practice.” They sought reassurances that the United States would “not impose penalties on financial institutions processing humanitarian trade in good faith without first engaging with them.”
In a statement to the news agency, the US State Department said that Washington wants to ensure sanctions do not impede humanitarian assistance to respond to the coronavirus (COVID-19) pandemic.
The Institute of International Finance (IIF), a global trade group of financial institutions, has estimated that the Iranian economy will in 2020 shrink by around 6% for the third consecutive year. It cited the impact of sanctions and the coronavirus pandemic.
Justine Walker, head of global sanctions and risk with ACAMS, an organisation of specialists tackling financial crime, was quoted as saying by Reuters that Germany stood out for its willingness to hold Iranian accounts—a stance that has continued despite the US sanctions.
Five Iranian banks, all subject to US sanctions—held roughly €3.8bn on deposit with the Bundesbank at the beginning of the year, according to the banks’ financial accounts. Some of this money has since been withdrawn, but the level of financial exposure is still above €3bn, Bank for International Settlements data from June shows.
Iran late on October 8 accused the US of targeting its “remaining channels to pay for food and medicine” in the midst of the coronavirus (COVID-19) pandemic by blacklisting virtually all of the Islamic Republic’s financial sector, cutting it off from the international financial system.
The Trump administration move blacklists 18 Iranian banks that had, so far, escaped most of the US sanctions imposed since the US in May 2018 pulled out of the 2015 nuclear deal between Tehran and six world powers, arguing
35 IRAN Country Report May 2021 www.intellinews.com