Why European Banks, Companies Are Avoiding Iran

U.S. Secretary of State John Kerry on Tuesday pushed back against claims that U.S. restrictions are preventing European companies from doing business in Iran following last year’s nuclear deal.

“Businesses should not use the United States as an excuse if they don’t want to do business, or if they don’t see a good business deal … that’s just not fair, that’s not accurate,” Kerry told reporters in London. “We sometimes get used as an excuse in this process.”

Kerry is due to meet representatives of British and European banks in London on Thursday to discuss sanctions relief under the terms of the international accord.

The Iranians have blamed remaining U.S. sanctions, which include a ban on Iran-linked transactions in U.S. dollars being processed through the U.S. financial system, for the reluctance of European banks to do business with them. In an interview with the New Yorker, Iranian Foreign Minister Javad Zarif complained that European banks are still hesitant of doing business with Iran out of fear of retaliation by the United States. “The United States needs to do way more,” he said. “They have to send a message that doing business with Iran will not cost them. Period. No ifs and buts.”

According to a recent report by the NY Times, the Europeans have pointed to new American visa regulations that make it more difficult for them to enter the United States if they have traveled to Iran. “Europe is being taken hostage by American policy,” Marietje Schaake, the vice president of the European Parliament’s Delegation for Relations With the United States, was quoted as saying. “We negotiated the nuclear deal together, but now the U.S. is obstructing its execution.”

The fact that Europeans and others are hesitant regarding investing their money in Iran has nothing to do with the deal but with the fact that Iranian economy and its policies haven’t been providing in the last years the right signals and atmosphere that attract investors, one Israeli official told Jewish Insider.

“Many of those sanctions are in place because of their unrepentant use of terrorism, their unbridled militaristic expansionism and their anti-Semitism and bigotry and illiberalism,” Jonathan Greenblatt, ADL’s CEO, said in an interview. “I have seen, to the best of my knowledge, no cessations in their anti-Semitic and bigoted activities, to the best of my knowledge, no lessening of their regional expansionism and to the best of my knowledge, no diminishment in their support of terrorist activities, so to the extent that there are sanctions in place for those specific reasons, I don’t know if we have any reason to believe they’d change their behavior.”

While pointing out that the position the ADL took against the Iran deal was taken before he joined as head of the organization, Greenblatt stressed that when questions are asked about whether or not Iran should join the family of nations, “I don’t think they behave like a member of the family.”

“I’m not an expert in nuclear physics, but what I do know is in terms of the fight against anti-Semitism and bigotry, Iran is on the other side of America, Iran is on the other side of Europe and Iran is on the other side of the civilized world,” said Greenblatt.

Speaking in London, Kerry maintained said the U.S. is telling European banks that Iran is open for business, with the exception of specific entities that are still sanctioned, including Iran’s Revolutionary Guard. “It’s important to have clarity and the clarity is that European banks, as long as it’s not a designated entity, are absolutely free to open accounts for Iran, trade, exchange money, facilitate a legitimate business agreement, bankroll it, lend money – all those things are absolutely open,” Kerry said.

“In its remaining time, the Obama administration will do everything possible to enable European business with Iran and the Europeans and Iranians will put enormous pressure on the next administration to continue that trajectory,” Mark Dubowitz, executive director of the Foundation for the Defense of Democracies, which opposed the Iran deal, told Jewish Insider.

According to Dubowitz, the only way European companies would be reluctant to rush doing business with Iran would be if the U.S. imposes meaningful economic sanctions on Iran for its support for terrorism, missile activities or human rights abuses. “It will take a bold administration — and Hillary Clinton may be tough-minded enough to do this — to resist the pressure and use the full range of American power to counter Iranian aggression,” he said. “If she signals a willingness to do that, European companies, especially the large banks and insurance companies, may stay out.”

Reuters contributed to this report

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