As of January 2016 European companies, firms and banks got the green light to engage with Iran when the nuclear agreement took effect. But something left European banks on a two way.
On July 2015, an agreement was reached to lift all financial sanctions on Iran opposed by the international community. That being said, American and European companies and banks would’ve been allowed to do business with Iran. On January 2016 the deal was signed and the lifting of financial sanctions began. On the first days many partnership and cooperation deals had been signed. Some banks like the Austrian Reifeisen bank were among the first banks to announce their interest to open office in Iran. But things didn’t go exactly like the storyline suggested. Financial sanctions on Iran from the European side was completely lifted. However due to the fact that only the sanctions related to Iran’s nuclear program was negotiated for, other sanctions opposed by the US was still in place and American banks and companies were still not able to interact with Iran.
On the other side European banks are safe to work with Iran without any or minimum legal barriers. However despite the opportunities and interest shown, that has not happened in a full scale. The answer is “US Department of the Treasury”. In order to further operate in the US and losing the risk of getting spider webbed in US sanctions, many European banks are still hesitant to work with Iran. Leading European banks like HSBC Ltd. and Deutsche Bank AG have made up their mind to not do business with Iran as part of their commitment to US agencies and the US sanction laws. Many banks have also paid heavily for carrying out transactions with some customers in Iran.
There has been many complains from Iranian officials in regards to this situation. The fact that many European banks are still not engaged with Iran has created problems not in regards to international transactions or unfreezing blocked money, but US Department of the Treasury and its policies are preventing foreign investments and bank to bank relations to take place. There are now medium sized European banks working with Iran however larger banks are still hesitant to take next steps. Experts say, if only one of the major European banks starts its collaboration with Iran, the way would be paved for others to join and break the fog of uncertainty. It is still early to say which major European banks will be the first, but looking at the market opportunity Iran holds, that’s bound to happen soon.
Currently Asian banks especially Chinese banks are taking the next major steps to finalize their operations in Iran. South Koreas Woori bank has already opened office in Iran. International bank presence in Iran and international money transferring being enabled would also directly effect Iran’s startups scene when it comes to FinTech and absorbing foreign investments.