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After the Spadework, Iran Deal Means Heavy Lift for Financial Institutions
By Irene Madongo and Kira Zalan
printIran's historic reentry into global markets Saturday came with expected fanfare and protest, and few surprises. Least surprising of all, the implementation of the sanctions accord means that the toughest work for banks could lie ahead. As outlined by the Joint Comprehensive Plan of Action signed in July, the European Union and other jurisdictions lifted the bulk of economic restrictions targeting Iran, clearing the way for trade and investments in Iranian energy, automotive and infrastructure projects. U.S. officials also rolled back measures aimed at central banks and foreign firms working with Iran. But for financial institutions and other companies with...
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The nuclear accord reached last year between five Western nations and Iran has done more than stir hopes and fears about the Islamic republic's return to global markets. For U.S. sanctions experts, the deal has also created a mountain of work, according to a former Treasury Department official.
Financial institutions in Iran have recently sought guidance from anti-money laundering consultants and attorneys in the United States amid a broader push by the Islamic Republic to reengage with the global banking system.
Several financial institutions in the European Union and Asia are "ring-fencing" their American employees and taking other preliminary steps to reengage with Iran months after economic sanctions were eased under a global nuclear accord.
Several U.S. banks are rejecting or blocking transactions involving dozens of entities removed from Western blacklists in January over concerns that the parties may have ties to the Iranian government.
Iran's recent steps to bolster its controls against money laundering and terrorist financing have resulted in few returns from wary global financial institutions, the country's top banking regulator said Friday.
U.K. banks are engaging in discussions with institutions in Iran in conjunction with the British government's efforts to renew trade with the country, according to a government official.
With the rollback of Iran sanctions underway, more banks in the Islamic republic are likely to seek to refill their coffers through lawsuits seeking damages for the restrictions, according to sources.
The expected reemergence of Iran on global markets will likely pose the toughest challenge for sanctions compliance officers in the coming year, according to Alexandre Lamy, an attorney with Baker & McKenzie's International Trade Practice Group.
Iran is in talks to begin working with an intergovernmental financial-crime watchdog as the country prepares for a potential rollback of international sanctions, an official with the organization said.