Page 32 - IRANRptFeb19

China’s Bank of Kunlun to restart trade with Iran after 60-day hiatus
accounts for each other and the transactions will be carried out using the their national currencies.
China’s Bank of Kunlun is to restart bilateral banking operations with Iran on December 10 following a 60-day hiatus caused by the reintroduction of heavy US sanctions against Tehran, according to the vice-president of the Iran-China Joint Chamber of Commerce, IBENA reported on December 9.
Iran’s trade with countries including China has been severely restricted in recent weeks. Beijing and Shanghai-based banks and corporations are dealing with difficulties and anxieties caused by the tough US sanctions regime targeting the Islamic Republic.
Bank of Kunlun vice-president Majid Reza Hariri reportedly said: "From tomorrow [December 10], interactions [with Iran] will resume through Kunlun bank. This is related to a general agreement between Iran and China to resume bank transactions through Kunlun.”
He was also cited as saying that Iranian individuals living or working in China would not be able to use the Kunlun banking channel given current regulations applied on an international level, but company-level transactions would be permissible.
The latest Chinese company to come under attack from the US in connection with its Iran policy is Huawei. Its chief financial officer and daughter of the company’s founder, Meng Wanzhou, was arrested while she was changing planes in Vancouver on December 1 and faces extradition to the US over allegations that from 2009-2014 she breached US sanctions drawn up against Iran through a Huawei subsidiary Skycom.
It remains to be seen whether the US will now target Kunlun for a second time in a decade due to its decision to continue trading with Iran.
8.2 Central Bank policy
IRR1bn daily cap placed on Iranians by central bank
Central bank says foreign banks with minimum capital of €5mn can open in Iran
The Central Bank of Iran (CBI) has announced a daily spending cap of IRR1bn ($9,434 at the free market rate) per person, according to a circular sent out to banks on December 9 as cited by Tasnim News Agency.
Given the disruption caused to Iran’s foreign exchange markets and the severe devaluation of the Iranian rial (IRR) by the new sanctions regime targeted at Tehran by the US, the CBI has for several months been trying to control cash in circulation and battle profiteering and speculation. It has also pushed profits from international trade into its designated NIMA payments system.
According to the memo, the new policy is aimed at combatting money laundering and further depreciation of the rial. Incidentally, it has had a significant impact on controlling currency fluctuations since its introduction earlier this week.
In large transactions, the IRR1bn maximum is applied to a person via their national ID number. That is tracked by the local banking payment system across all bank accounts.
Another regulation limits bank card to bank card payments to IRR30mn per day per person.
Foreign banks meeting a minimum capital requirement of €5mn can apply for a licence to open in Iran, according to a Central Bank of Iran (CBI) announcement cited by Tasnim News Agency on November 25. Previously, the only foreign bank presence generally permitted under the CBI’s rules was through a representative office, an entity not allowed to conduct
32 IRAN Country Report February 2019 www.intellinews.com