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Iranian Rial


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25 minutes ago, screwball said:

fter a series of negotiations and follow-ups by Iranian officials and investment companies, the head of Iran-Italy Chamber of Commerce announced that the remaining banking issues between the two countries will be resolved within two months.

 

 

I am definitely getting excited !!

 

pp

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9 hours ago, screwball said:

Says it all...

 

The goal of the central bank is to entrench the rial in the currency basket of other nations, meaning that our major business partners would employ the Iranian national currency for imports as we use their national currencies," Samad Karimi was also quoted as saying by the official website of CBI.

I'm loving the news! :goodnews:

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12 hours ago, pokerplayer said:

With all the reading I have done, SB's articles and all I still stand by my original statement that I believe we will see some major movement before the end of this month.

 

As well I am sure it will move higher before the dinar as those dummies can't seem to get anything done.

 

pp

I am thinking soon but think before jan if not jan...

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nd Markets
Sunday, November 12, 2017

Gov’t, TM to Build 55,000 Houses in Old Districts

 

The Iranian government and Tehran Municipality are assessing regulations of their joint project to build 55,000 residential units in Tehran’s distressed areas under the moniker “Pishgam Housing Plan”.

During a coordination meeting between the officials of Urban Development and Revitalization Company of Iran as the government representative and Urban Renewal Organization of Tehran as the city’s urban management agency, they discussed different aspects of the project such as its legal process in the Cabinet and Money and Credit Council, Tehran Municipality’s official website reported.

According to Tehran Municipality’s report, this organization will utilize its full potential to implement the Pishgam Housing Plan that will first focus on Tehran’s old neighborhoods and then expand in other cities.

It was determined that the next meeting will be held on UDRC’s premises, in which the officials will undertake the final assessment of the project’s draft to be presented to the Cabinet for approval.

However, this is not the first time the government has made a pitch in the country’s housing sector.

Back in 2007, the administration of former president, Mahmoud Ahmadinejad, initiated a large-scale construction project named Mehr Housing Project to provide two million low-income people with housing units through free land and cheap credits, but it was not completed by the end of his term in office.

The project dragged on during the first tenure of President Hassan Rouhani and caused many headaches for the government that has been continuously pressured to finally see it through the finish line.

This was followed by the “Social Housing Plan” that refers to a government scheme to provide homes to low-income families by building thousands of residential units each year. The scheme is to replace Mehr Housing Project as the signature housing policy of the incumbent administration.

 Loans for Major Builders

As per the government’s policy to shift the focus of major builders to distressed urban areas and informal settlements and offer them special incentives to move their activities to those parts of the city, Roads and Urban Development Minister Abbas Akhoundi has offered new options for major builders’ activities.

During a meeting with well-known builders and construction companies, the minister assessed the issues of residential units’ pre-sale while he clarified how to start activities in distressed urban areas and informal settlements.

Akhoundi referred to the mass builders’ problem of acquiring loans from banks and pre-selling their apartments, as he emphasized the necessity of having clear regulations in this regard.

“If a builder intends to pre-sell its building and still get a loan from Bank Maskan, the bank needs to be notified at the start of the contract and the builder also needs to open an account in the bank and deposit all earnings in that account so the bank can be sure that the resources are being used in the project,” he said.

The minister believes that this will resolve many issues for banks and builders, as it creates a good and safe system for residential units’ pre-sale.

“Pre-selling an apartment is a very transparent process all over the world but it also contains a level of risk for both sides,” he said, stressing that different organizations such as guarantee funds are active in this field in other countries.

Akhoundi added that pre-selling an apartment will definitely need some kind of guarantee both for customer and the owner, as it makes their deal credible and favors both sides.

The minister noted that the problem in distressed urban areas and informal settlements is not the volume of residential units but their quality.

“For instance, we have three million residential units in an informal settlement, which can be considered only as a roof over the head but in terms of quality, they cannot really be considered a residential unit,” he said.

Akhoundi presented models whereby the government helps builders to become active in old neighborhoods by offering them land to start their project or by providing them enough resources to buy a piece of land in distressed urban areas.

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10 hours ago, bohica said:

still wanting to sell my Rial.  I have 100 new 100,000 bills.  I would like 1000.00 for them but am open to all honest offers. Some have shown interest and have given prices that I would accept but have never gotten back to me to finalize things.  

If I had money mate I would buy them off you...but I am tapped..

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Larijani calls for promoting foreign investment

علی لاریجانی
News ID: 4142156 - Sun 12 November 2017 - 17:15
TEHRAN, Nov. 12 (MNA) – Ali Larijani, the Speaker of Iran’s Parliament urged the Iranian law-makers and officials to realize the potentials provided after the removal of anti-Iran sanctions.

“The potentials provided after the removal of sanctions should be exploited for the national interests of the country and attracting foreign investment,” said Ali Larijani, the Speaker of Iran’s Parliament.

The top law-maker made the remarks addressing the Mine and Mining Industries Fraction of Parliament which held a meeting with guests like Iranian Minister of Industry, Mine and Trade, Mohammad Shariatmadari on Sunday.

“All officials of the country including the Supreme Leader are attaching great importance to the mining section of economy because it paves the view for the country’s path of future,” reiterated the Iranian legislator.

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s the government is busy drafting the budget for the upcoming fiscal year (March 2018-19), director general of the Supreme Audit Court of Iran, Adel Azar, has homed in on the deficiencies of Iran's budgeting system.

"Over the years, the government and the parliament have focused on committing resources to meet all but 100% of the operating budget rather than the capital budget," Azar was quoted by IRNA as saying.  

Government Spokesman and President of Planning and Budget Organization Mohammad Baqer Nobakht said the government will submit the budget bill to the parliament on Dec. 5.

“One of the features of next year’s budget is the performance-based allocation of budget to each governmental body and not the traditional method of distributing the money according to the treasury inflows,” he said.

The parliament-approved budget needs the final endorsement of the Guardians Council—the body in charge of ascertaining the constitutional and Islamic nature of all laws.

Addressing an open session of the parliament on Monday, Azar said the current budget approach in Iran has reached an impasse and it needs to undergo extensive alterations.

"A total of 87% of the budget is used as operating expenditure of governmental entities against their rapidly shrinking capital budget," he said.

According to Azar, capital expenditure accounted for 25% of the budget in the fiscal 2011-12 compared to 13% last year (March 2016-17), while the share of operating budget increased by 87% last year from 74% in 1390.

"If the current approach persists, we’ll have to put an end to capital expenditure budget altogether. The government issues bonds, sells oil and shares of public companies only to finance its operational spending,” he said.

Referring to indiscipline, lack of transparency and deviation from planned objectives as the main features of the Iranian budget, the official said there are 27 development projects in Iran which will take more than 41 years to complete, 44 projects requiring between 31 and 40 years to finish, 284 projects to take between 21 and 30 years, 658 projects will last for between 11 and 20 years and 755 projects without a timeline across the country.

"For these projects to become operational, as much as 5,080 trillion rials ($127 billion) are needed at the national level and 490 trillion rials ($12.25 billion) at the provincial level," he said.

About money squandered on development projects, Azar said only about half of the disbursements on development budget turns out to generate favorable outcome while the rest is misspent due to lack of transparency in planning.

"About 3% of the budget bill submitted to the parliament for the fiscal 2012-13 underwent changes by the lawmakers, 16% in 2013-14 and 8.7% for the budget bill of 2017-18. Often, the government is on target in its estimation of spending, but not the revenues it will generate over the year," he said.  

“Unlike any other country, Iranian governments usually keep the information on their debts’ and claims’ records confidential, which is one of the troubles of the audit oversight body,” Azar concluded.

Budget Shortfall

 

Iran’s budget deficit came in wider than expected in the five months of the current fiscal year (March 21-Aug. 22) and reached 182.7 trillion rials ($4.56 billion), the latest data released by the Central Bank of Iran showed.

The shortfall for the period was higher than forecast, which amounted to 136.5 trillion rials ($3.41 billion).

To cover the widening deficit, the government has been issuing bonds. The five-month data show 231.3 trillion rials ($5.78 billion) worth of bonds were issued during the period, 8.2% more than the corresponding period of the year before.

Spending stood at 893.9 trillion rials ($22.34 billion) during the period under review, indicating a rise of 15.1% year-on-year. The figure is around 83% of the expenditure predicted by the government in the budget.

The government only spent 47.6 trillion rials ($1.19 billion) on development projects, not only 8.2% less than the similar period of last year but also much lower than the projected 303.1 trillion rials ($7.57 billion).

The current fiscal year’s budget stood at 11.5 quadrillion rials ($305 billion) as per the law approved by the parliament back in March just before the beginning of the year. It includes 3.98 quadrillion rials ($90.5 billion) earmarked as “general revenues”, in addition to a whopping 8 quadrillion rials ($211 billion) to fund state companies, institutions and banks.

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It is planned to remove zeros off currency and make the rial value real," Iran's government website quoted Ahmadinejad as saying. "The value of rial, under the law, is calculated on the basis of the price of gold. For some reason, the rial has been devaluated and we have to return its value to the one existing in the law."

 

old...do,you think their view has changed?

Edited by screwball
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5 hours ago, screwball said:

It is planned to remove zeros off currency and make the rial value real," Iran's government website quoted Ahmadinejad as saying. "The value of rial, under the law, is calculated on the basis of the price of gold. For some reason, the rial has been devaluated and we have to return its value to the one existing in the law."

 

old...do,you think their view has changed?

 

Iraq in January and Iran in March.  The perfect storm.  

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Iran, Austria to trade in non-dollar currencies

Iran-Austria
News ID: 4146868 - Thu 16 November 2017 - 21:39
TEHRAN, Nov. 16 (MNA) –An Austrian bank official said that to reassure traders and businessmen, Kontrollbank will support non-dollar currencies in trade transactions between Iran and Austria.

 “Our traders and businesspeople are worried about US new sanctions against Iran and to relieve their stress we are offering non-dollar currencies transaction services,” said an official of Oesterreichische Kontrollbank, better known as Kontrollbank, on Thursday.

He made the remarks after the holding a meeting with the members of Commerce Chambers of Tehran and Vienna.

“Our bank is a private sector bank and its specific area of activity is exporting to other countries,” he added.

The bank offers investment insurance against political risks for all European applicants willing to do business with Iranian partners.

After the implementation of the nuclear agreement of 2015 in early 2016, the Austrian Federal Ministry of Finance and OeKB defined conditions for covering Iran transactions, and since then cover for investments, guarantees, and offer of covers are issued again.

 
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ranian banks are expected to open their first branches in Munich as early as the next few months while the next stop is Austria, the secretary-general of Tehran Chamber of Commerce, Industries, Mines and Agriculture in Vienna announced late Thursday, saying this will resolve many trade issues.

"Our specific proposal to remove banking hurdles to facilitate trade ties has been to open branches of Iranian banks in Munich, the capital of Bavaria, and this proposal has been met positively from economic officials, including the head of Bavarian Parliament," Bahman Eshqi also told IRNA.

The private sector official was speaking on the sidelines of a joint trade meeting between the commerce chambers of Tehran and Vienna, which was also attended by Iran's Ambassador to Austria Ebadollah Molaei.

Eshqi led a 36-strong delegation consisting of Iranian companies' representatives that also travelled to Slovakia on Monday.

"The first Iranian bank branch in Bavaria will be established early next year and hopefully with the opening of our next branch in Austria, all our trade issues rooted in banking relations will be resolved," Eshqi added.

He was referring to a trio of private banks, namely Middle East Bank, Sina Bank and Parsian Bank, who have been negotiating the launch of a Munich branch following the implementation of the nuclear deal in 2015.

The TCCIM official said regardless of what transpires in Iran-US relations in the future, Iran's ties with Austria are very good, as the country is more "trustworthy" than its European peers.

During his speech at the joint event, Eshqi said efforts to revive economic ties with Austria have been hailed by TCCIM's experts as a "very successful example of Iran's economic return to the global community".

He referred to Austria as Iran's gateway to Central and West Europe, adding that both sides have had constructive cooperation while TCCIM is proud to count itself among the collaborators of Austrian Economic Chambers and to hold various educational courses in Tehran with its help.

The Iranian ambassador pointed to the notable headways made in Iran-Austria ties in his remarks at the joint conference, stressing that it is now possible for both sides to prepare the grounds for making more promising joint efforts.

"Even though the volume of trade between the two countries is not at a suitable level yet, it has been continuously on the rise and we value our inter-provincial ties very much," Molaei said.

The ambassador said that as a metropolis with ample potentials, Tehran considers Vienna an important partner, adding that what is needed now is identifying cooperation opportunities through a correct and efficient economic lens.

"Potentials in areas, including environment, auto, telecommunications, agriculture, water management, medicine, energy, petrochemicals, food, mines, steel and other small- and medium-sized industries, can be realized in the future," Molaei said.

"Iran's Embassy in Vienna is fully ready to offer any kind of services in line with realizing these goals."

A representative with the Oesterreichische Kontrollbank (OeKB), who attended the joint event, said the bank is ready to support Iran's plan to remove the US dollar from its transactions.

"In our cooperation with Iran, we will in no way pursue the use of US dollar," Erwin Marchhart, director for export services consulting at the bank, was quoted as saying by Fars News.

He added that Iran has been historically committed to its payment deadlines and therefore, the lender is optimistic about working with the country in the future.

"Considering the current level and condition of trade ties between Iran and Austria, the bank is ready to increase the cap of its guarantees for businesses with Iran to €50 million," Marchhart reportedly said.

"In the case of specific long-term engagements with Iran, we can assist Austrian businessmen who wish to work with the country and provide guarantees, considering the share of their exports to Iran."

Marchhar noted that as Iran is among the seven countries prioritized for cooperation by Austria, OeKB is also aiming to expand its services, but faces challenges.

When 14 Iranian banks clinched a foreign finance deal worth €1 billion with Austria's Oberbank in late September to mark the first such deal reached after the nuclear accord with European banks, OeKB's representatives also met with Iranian officials to discuss ways of expanding financial, banking and investment relations between the two nations.

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Bank Sepah, the oldest Iranian bank, has denied reports in the local media that its Frankfurt branch has been subject to a new round of sanctions, saying foreign exchange operations of the branch remain unhindered.

“The relationship of Bank Sepah with Germany is expanding as agreed upon with the banking officials of Germany. On Friday alone, more than €52 million worth of foreign exchange transactions were conducted in the Frankfurt branch of the bank,” reads a statement by the bank’s head of International Affairs Department published on its official website.

“The Frankfurt branch of Bank Sepah has so far provided more than $607 million worth of a variety of credit and foreign exchange services in Germany,” Amir Hosseini added.

The branch is connected to TARGET2, the real-time gross settlement system for the Eurozone, as well as SEPA, the payment integration initiative of the European Union.

The bank also has operational branches in other European cities, namely Paris, Rome and London.

In recent days, the Jerusalem Post, an Israeli newspaper, had reported that BaFin, Germany’s Federal Financial Supervisory Authority, has subjected the branch to a credit limitation. This led a number of local media to misconstrue the report.

According to the official BaFin statement published on Nov. 14, the supervisory authority “issued an order to Bank Sepah-Iran, Frankfurt Branch, prohibiting the institution from lending until further notice” on Sept. 12.

“BaFin had identified contraventions of requirements for a proper business organization within the meaning of section 25a (1) of the Banking Act (Kreditwesengesetz–KWG),” it adds.

Section 25a of the aforementioned act is subtitled “particular organizational duties, authority to issue orders” and deals with the establishment of proper business organization as well as the responsibilities of the management board among other things.

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Iran gears up for trade, investment boom

سرمایه گذاری
News ID: 4147396 - Sat 18 November 2017 - 09:06
TEHRAN, Nov. 18 (MNA) –After decades of sanctions and taking apart from international lucrative markets, the Islamic republic Iran is now ready to take advantage of these opportunities.

Thanks to its rich economic and investment potentials, the majority Iranian industries are full of economic untapped opportunities especially the small-and medium-sized enterprises (SMEs).

Regretfully, lack of global promotions on Iranian economic arena has led to the inattention of Iran potentials. Although the existing information about Iran is less widely and suitably published, many foreign business owners entering Iran are surprised at different infrastructures and advantages, and admit that Iran is not quite well known at the international.

At the moment, few countries could be seen in the world with Iran's conditions and opportunities for investment. After decades of sanctions and taking apart from international lucrative markets, the Islamic republic Iran is now ready to take advantage of these opportunities.

Meanwhile, following the implementation of Joint Comprehensive Plan of Action (JCPOA), Iran has received letters of credit (L/Cs) and finances from different countries which are keen to make investment in Iran.

Foreign Investment Projects

Head of Organization for Investment, Economic and Technical Assistance (OIETAI) Mohammad Khazaei has recently announced that Iran approved 31 foreign investment projects with a total value of $712 million, adding that OIETAI has approved over $21.8 billion worth of foreign investment since the eleventh government took office (in September 2013), IRNA reported.

Iran has absorbed $14 billion of the approved figure during the period, the official added.

Following the implementation of JCPOA, Iran has received letters of credit and finances from India, Russia, South Korea, China, Austria and Denmark, Khazaei stated.

He listed the €8-billion L/C from South Korean Exim Bank and Chinese $10-billion L/C and the €1-billion contract with an Austrian bank as Iran's main financial and banking achievements.

According to the Sixth Five-Year Development Plan (2017-22), Iran should attract $3 billion in foreign investment annually.

Renewable Energy Sector

Meanwhile, Head of Renewable Energy and Power Utility Organization (SATBA) Mohammad Sadeqzadeh said that foreign investments worth $1.5 billion were attracted in the renewable energy sector.

He added that $4.1 billion in foreign investment projects in renewable energies has been registered.

During Iran Economic and Investment Opportunities Forum (IEIO 2017), which is scheduled for November 25-28 in Tehran, Iran will present investment opportunities valued at over $35 billion to foreign investors, said the event's executive secretary.

"Companies from China, Germany, Denmark, Finland, France, Russia, Japan, Serbia, South Korea, Spain, Switzerland, Sweden, the United Arab Emirates, Hong Kong, India, and Saudi Arabia active in various fields including tourism, clean energy, agriculture, oil, gas, petrochemicals and auto industry are to take part in the forum," Amirreza Hassani said.

The event, he noted, is to be held in cooperation with World Federation of Free and Special Economic Zones (FEMOZA), United Nations Industrial Development Organization (UNIDO), United Nations Conference on Trade and Development (UNCTAD), the World Bank, European Investment Bank, Asian Development Bank (ADB), and World Association of Investment Promotion Agencies (WAIPA).

Mining Sector

Recently, Deputy Minister of Industry, Mine and Trade Mehdi Karbasian announced that Iran is seeking $50 billion in investment for its mining industries out to 2022 and has signed agreements with several European and Asian banks in the past few months.

"We are in need of $50 billion for investment in the mining and mining industries of Iran," Karbasian told Reuters, speaking on the sidelines of the Imarc mining conference in Melbourne.

"In the past two months, we have had agreements with South Korea, Austria, Denmark and it's on the way for other countries like Germany," Karbasian added.

Foreign Investment Boom

A deal between world powers and Iran to wind back economic sanctions two years ago in return for modification on its nuclear program, has seen a boom in foreign investment in Iran, said an investor.

Diego Biasi, who is the CEO of Quercus Investment Partners, an infrastructure fund that specializes in renewable energy investments said that his UK-based fund is one of the world's largest investors in renewable energy.

Biasi told Sky News that there have so far been no concerns from investors about US President Donald Trump's policies towards Iran and the likelihood that they might return to a sanctions policy.

"By matter of fact, investors are increasing their interest in the opportunity that Iran is showing at the moment in the renewable energy sector," he said.

Biasi also said he has met a number of Australian investors during his recent visit to the country.

"Historically, Australia has been a trade partner of Iran before the sanctions, and is pushing new trade deals with Iran in the post-sanction era."

He said Australia's natural ability to supply solar power makes it an attractive market to invest in.

"In the foreseeable future, as we grow more in territories outside of Europe, we will be looking at Australia as one of the top priorities outside Europe," he added.

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2017

Forex ETS to Expedite Iran's Plans for Rate Unification

 

The Central Bank of Iran’s Exports Department has sought to provide more details on the online gateway recently established for allowing members of the banking system to better trade in foreign currencies, stressing on its importance for unifying the dual foreign exchange rates.

“The establishment of this system facilitates the process of unifying forex rates and is considered a platform for realizing this goal,” Samad Karimi, the head of the department, also told ILNA.

In the system first launched in Sept. 2016 and made operational on Oct. 29, 2017, which is officially referred to as the Electronic Trade System, members of the interbank market can engage in forex deals at higher speeds and with greater efficiency.

According to Karimi, the project is one of the many measures taken in line with establishing a managed floating foreign exchange system.

CBI’s promise of unifying the rates by the end of the previous fiscal year (March 20, 2017) has remained unfulfilled, prompting CBI Governor Valiollah Seif to promise that the goal will be realized soon in the new administration that took office in the summer.

Another important step, the official notes, was CBI’s mid-summer directive that allowed banks to engage in trading foreign currencies at free market rates, as opposed to being limited to the official rates that are considerably lower.

“The ETS is aimed at increasing the depth of cash deals in the interbank market and directing forex transactions to the banking system [and away from moneychangers] to act as one of the major tools of realizing the rate unification goal,” he said.

“Banks can move to make up for their forex resource deficits in the market within the system with a positive open net position and quickly balance their position and manage their forex market risk.”

Referring to another function of ETS as providing better liquidity risk management, he elaborated that exporters, foreign investors and natural and legal persons active in the economy with forex assets will be able to sell their assets in the interbank market at open market rates and convert them into rial.

As to other functions of the system, Karimi said it closely follows forex transactions while supporting the sale and purchase of currency by and from non-oil exporters, investors and foreign companies.

“Although as part of the next phases and if the rate unification plan is implemented, currency forward, currency option and currency swap transactions will be handled by the system, cash transactions must first find their place in the system,” he added.

The central bank official noted that hard currency will be supplied more efficiently to members of the interbank system with the added benefit being the correspondent role it bestows on banks to purchase forex from exporters, foreign investors and companies.

“Banks will introduce their official correspondent accounts to exporters, whereby they deposit their foreign currency to the accounts and banks will sell them in the interbank market,” he elaborated, adding that if the banks do not possess the rial resources to purchase the hard currency, they will be able to sell it to the central bank.

In other words, the system eases the process of getting finance for local businesses and directs forex transactions of exporters to the banking system while incentivizing businesses to conduct their work through the system, as it entails risks lower than those of exchange shops.

“Increasing the presence of banks in the market provided by this system enhances its credibility and will cause the foreign currency resources and expenses of the country to be managed better, clearer and at higher speed,” Karimi concluded.......https://financialtribune.com/articles/economy-business-and-markets/76535/forex-ets-to-expedite-irans-plans-for-rate-unification

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senior Iranian official announced that there are no significant banking issues with China and the UAE, as hurdles with Turkish Halkbank are being removed.

“About two months ago, there were reports that bank accounts of Iranian petrochemical companies in China are being blocked but the issue was mostly resolved through a series of negotiations,” Hossein Yaqoubi, director general of International Affairs Department at the Central Bank of Iran, was also quoted as saying by Fars News Agency.

The official noted that Iranian citizens and students in China had experienced the same problem with their banks, but those issues have also cleared as the two countries are resuming their banking ties.

In recent weeks, there have been numerous reports of Iranian account closures first in China and then in the UAE, which heightened fears that the tougher line espoused by the new US administration is pushing global banks to further isolate Iran.

As Yaqoubi elaborated, every once in a while the Office of Foreign Assets Control of the US Treasury Department focuses on the banks of a particular country.

The CBI official noted that in line with that policy and in order to create hurdles for Iran, OFAC started pressuring Chinese banks to cut their ties with the Middle Eastern country, claiming that they [Chinese banks] are not implementing the intensified regulations of Financial Action Task Force.

“We vigorously followed up the issue as we noted in our first letter to Chinese supervisory officials that the closure of the bank accounts of Iranians is improper and we do not expect such things to happen, especially considering that the Asian superpower is Iran’s biggest trade partner both in terms of imports and exports,” he added.

He noted that Chinese officials said there was no pressure from them on the banks but they took those actions on their own to demonstrate their determination in implementing the FATF regulations.

“Currently, Chinese banks do not block Iranians’ accounts but they might be a little more sensitive about them,” he said.

According to Yaqoubi, these regulations do not concern Iranians alone, but the documents of citizens of any other country who want to open an account or transfer money have to be assessed.

“Banks are obligated to determine the source of the money and its destination to check whether they are on any sanctions’ list or linked to any terrorist organization,” he added.

 Turkey, Emirates

The CBI official also announced that the Iranian banking system’s issues with Turkish Halkbank have mostly resolved.

“The Turkish bank considered heavy restrictions on two Iranian banks, but we solved the issue through a series of negotiations with their officials,” he added.

A few months ago, Iran-Turkey banking ties were overshadowed by the detention of a senior Halkbank official in the US in March for allegedly violating Iran sanctions. The incident caused problems for Iranian business transactions with the major state-owned lender in the neighboring country.

According to Yaqoubi, political matters significantly affect banking relations between two countries and during Turkish President Recep Tayyip Erdogan’s recent visit to Tehran, it was agreed that Iranian banking system link up with a major Turkish bank and fortunately most of the process is already complete.

“Five Iranian banks have requested to establish correspondent relations with the Turkish bank. The move can notably reduce the costs of money transfer between the two countries and Halkbank will no longer be the only bank in Turkey with correspondent relations with Iran,” he added.

The official further said the closure of Iranian bank accounts by UAE banks was only confined to the Emirates NBD banking group that has had no role in Iran-UAE banking relations.

“After international sanctions against our banking system were intensified, NBD was one of the first Emirati banks that ended all its correspondent relations with Iran,” he said.

Yaqoubi stressed that transferring money to UAE still goes through the banking system even if money exchangers handle most of the transactions, clarifying that this does not mean banking relations between Iran and Emirate are blocked.

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resident Hassan Rouhani has presented two bills for making amendments to the current Law of Combating the Financing of Terrorism and the Law of Anti-Money Laundering.

According to the introductory section of both laws published on the official news portal of the administration, reforms to the CFT law are meant to better address the definition and inclusion of terrorism-related crimes, differentiate between people or organizations engaged in terrorism, define the geographical inclusion of prosecuting financing of terrorism within and outside the country and following up on crimes against international organizations without a representative office in Iran.

The reform measures aim to better define examples of national and international terrorist persons, groups and organizations by the Supreme National Security Council, and put in place more efficient regulations to confiscate assets and instruments of terrorism financing.

Reforms to the AML law, on the other hand, target faults, including lack of proportion between crimes and punishments, lack of deterrence and efficiency of punishments, confinement of the crime only to local sources and lack of prosecuting money laundering crimes independent of the original crime.

The reforms also take aim at shortage of executive instruments to confiscate assets and instruments of committing money laundering offenses and the lack of an acceptable operational structure of bodies combating money laundering i.e. the Financial Intelligence Unit affiliated with the Ministry of Economic and Finance Affairs.

The CFT law was first framed and approved close to two years ago, and was subsequently notified by the Cabinet about three weeks ago.

The AML law was initially put in place about 10 years ago and was finally implemented after the Cabinet meeting about two weeks ago.

Iran has been continuously ramping up efforts in line with better adhering to international AML/CFT laws, as it faces scrutiny from the Financial Action Task Force–the intergovernmental group specifically in charge of devising and monitoring the implementation of AML/CFT regulations.

The organization has currently extended the suspension of active countermeasures against Iran until further notice, urging the country to fulfill its commitments by Jan. 31, 2018. 

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Iran hails improving banking ties with UK

Tehran, Nov 20, IRNA – Improving banking relations with UK is one of the most important means to develop relations with that country, Director of Europe and Americas Department at the Trade Promotion Organization of Iran said.

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Elaborating on Secretary of State for Foreign Affairs Boris Johnson’s upcoming tour to Iran, Behrouz Hassan Olfat said, 'This is a political trip and the coordination has been done by the Iranian foreign ministry.”

“The exports and imports volume between Iran and UK was $40m and $366m, respectively, in Iranian calendar year 1395 (March 20, 2016-March 19, 2017) and the figure was $29m and $536m during the first 7 months of the current Iranian calendar year (ended on March 20, 2018),” he added.

Olfat went on to say that the balance of trade between Iran and the UK improved from -376 to -326 in one year.

He pointed to new energies and power stations as other issues which are important for both countries' cooperation.

“Two or three Iranian banks are now active in the UK, but there are still some limitations for these banks since they are working under the UK regulations,” he said.

“Iran and the UK have cooperation in petrochemical, oil and gas, communication, selling and repairing airplane engine, developing Tehran's Imam Khomeini International Airport, building hospital, producing drugs and serum and wind turbine,” Hassan Olfat said. 

9376**2050

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ehran Chamber of Commerce, Industries, Mines and Agriculture has conducted a study on the presence of foreign banks in different countries and its  economic impact, underscoring the lack of such a presence in Iran and the missing advantages.

The private sector institution employs data and research provided by World Bank and Stijn Claessens, a Dutch economist who currently serves at the International Monetary Fund’s Research Department.

“Recent statistics on the presence of foreign banks in 113 countries indicate that only 11 countries are bereft of foreign banks, including Iran and Saudi Arabia,” the study published on TCCIM’s website announced.

Romania boasts the highest number of foreign banks on its soil, with these lenders making up 82% of all financial institutions in the southeastern European country.

Poland’s share of foreign banks at 76%, Czech Republic at 62% and Singapore and UK each at 58% complete the top five.

This is while a significant number of Asian countries, some of whom neighbor Iran, are present on the list: Foreign banks take up a 48% share in Indonesian banking system while the shares of Turkey, UAE and India stand at 38%, 22% and 12% respectively.

According to the study, in light of the development of south-south cooperation – denoting exchange of resources, technology and know-how between developing countries, especially following the Great Recession of 2008, a number of foreign banks entering emerging economies belonged to developing countries.

“However, the fact remains that a majority of foreign banks in developing economies are institutions belonging to advanced economies,” the TCCIM report notes.

About 42% of Malaysian banks consist of foreign institutions, but only 9% of those are institutions originating from developing countries. The meager share is highly evident in China, where one-fifth of the country’s banks are foreign ones, but only 2% of those are from developing countries.

 Untapped Boon

TCCIM enumerates the various economic boons the presence of foreign banks can entail for the host countries: from development and expansion of financial technology and fintech startups to wide-ranging trade and investment benefits.

“Considering changes in the structure of financial systems after the financial crisis, international banking is still regarded as one of the major sources of finance for developing countries,” the study said.

The report noted that the important and positive effects of the presence of foreign banks on funding businesses and boosting the efficiency of resource allocation have caused developing economies and emerging markets to benefit from them, even though the global financial crisis had a negative impact.

“Lack of foreign banks’ presence in Iran on the scale witnessed in other similar developing economies shows that the country has been unsuccessful in utilizing funding resources, especially when it was not subject to sanctions,” the study writes.

It added that based on an article in the Sixth Five-Year Development Plan (2017-22), all executive bodies and the government have been obligated to do what is necessary to prepare the ground for the presence and cooperation of foreign financial institutions in Iran.

TCCIM, therefore, calls on all parties involved to allow foreign banks to enter Iran for the benefit of domestic economy.

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