The Central Bank of Iran announced this week that SWIFT completed the on-boarding process for all non-sanctioned Iranian banks and a number of their international subsidiaries and branches, in line with sanctions relief provided for in the Joint Comprehensive Plan of Action (JCPOA).
Iranian banks’ connectivity to the global financial system will gradually expand as relationships with international financial services providers are re-established. This month, a board member at Raiffeisen Bank International said the bank was in “intensive talks” with Iranian banks and wants to reopen an office in Tehran. Similarly, the German vice chancellor and federal minister of economic affairs and energy told reporters that Germany was interested in “restoring banking relations with Iran as soon as possible.”
The JCPOA presents both opportunities and challenges for a wide variety of banks and multinational business enterprises. The sanctions relief provided for by the JCPOA is significant, yet (i) limited to some aspects of proliferation-related sanctions, (ii) does not include individuals and entities subject to terrorism and human rights-related sanctions such as the IRGC, (iii) and varies between US, EU, UN and other national programs. The ability to demonstrate an effective and credible approach to managing these risks will be key for firms looking to re-enter Iran.