Iran V: Sanctions
Competition
AHC
March 16
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, 2012 the Asian Clearing Union.186 By September of 2011, India had resumed payments to Iran by using other financial intermediaries, but it is unclear how long the present arrangement will last.187 The EIA reports that: In 2011, Iran experienced significant problems with receiving payments from India for its exports, when the Reserve Bank of India halted a clearing mechanism due to sanctions. Some of the payments have been cleared through Turkish and UAE banks. More recently, NIOC announced that India has cleared all oil debts to Iran through Gazprombank of Russia and Iran has already received all overdue payments for its exports to India.
US financial sanctions blocked China from paying at least $20bn for oil imports, leading Tehran and Beijing to initiate talks about using a barter system to exchange Iranian oil for Chinese goods and services in order to circumvent sanctions.188 These problems are almost certain to grow far worse now that EU has directed SWIFT to “discontinue its communications services to Iranian financial institutions that are subject to European sanctions.” SWIFT affects at least 19 Iranian member banks and 25 financial institutions, including Bank Melli, Bank Mellat, Tejarat Bank, Bank Refah, Future Bank, Persia International Bank, Post Bank and Europäisch-Iranische Handelsbank. Iran has no alternative to the use of SWIFT, and it is likely to face even more serious problems during 2012 as the US Congress passes additional sanctions on Iran’s banks and ability to conduct foreign trade. March 2012, the U.S. Senate and House of Representatives continue to work on bills that would seek to blacklist essentially every Iranian bank, threaten penalties against European and other overseas companies that deal with any of these banks, and to target communications, software and technology companies that continue doing business with Iranian banks. 189 This legislation would interact with the EU action on SWIFT, and affect all Iranian institutions and any foreign institution that acted a front or cover for Iran. Members of Congress state that while the U.S. Treasury has already blacklisted 23 Iranian banks, Iran is using more than 20 other banks to finance its nuclear program and support for regional militant groups.190 Nevertheless, the recent rise in oil prices amid uncertainty and upheavals in the Middle East could still create a limited “cushion” for Iran. Prices are likely to remain high and volatile as long as protests and concerns about supply disruptions continue across the region. The global
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The Wall Street Journal, “India looks beyond Iran for oil,” Rakesh Sharma, July 19, 2011. http://online.wsj.com/article/SB10001424052702303661904576455290145486746.html?mod=googlenews_wsj 187 Bloomberg News, “India clears $5 billion in overdue oil debt to Iran,” Ladane Nasseri, September 4, 2011. http://www.bloomberg.com/news/2011-09-04/india-clears-5-billion-in-overdue-oil-debt-to-iran-irnasays.html 188 The Financial Times, “China and Iran plan oil barter,” Najmeh Bozorgmehr, July 24, 2011. http://www.ft.com/intl/cms/s/0/2082e954-b604-11e0-8bed-00144feabdc0.html#axzz1TPEoItVf 189
Laurence Norman and Jay Soloman, “EU-US Split on Iran Banks Seen as Widening,” Wall Street Journal, March 16, 2012. 190
Laurence Norman and Jay Soloman, “EU-US Split on Iran Banks Seen as Widening,” Wall Street Journal, March 16, 2012.
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