WASHINGTON Oct 10 New guidance from the Obama
administration offers reassurance to foreign banks which have
been skittish about doing U.S. dollar transactions with Iran,
lawyers and former sanctions officials said on Monday.
The guidance comes after months of complaints from Tehran,
which says that remaining U.S. sanctions have frightened away
trade partners and robbed Iran of the benefits it was promised
under the nuclear deal it concluded with world powers last year.
The guidelines, issued by the U.S. Treasury Department's
Office of Foreign Assets Control on Friday, clarify that
non-U.S. banks can do dollar trades with Iran, provided those
transactions don't pass through financial institutions in the
Although last year's deal technically allowed a raft of new
international business deals with Iran, including U.S. dollar
transactions, in practice many banks have stayed away, fearing
that they would inadvertently break remaining sanctions.
For instance, many executives believe that dollar
transactions will at some point transit through a U.S. bank,
thus breaking sanctions, said Melvin Schwechter, a Washington,
D.C.-based sanctions attorney at Baker & Hostetler LLP.
"I've generally advised people to stay away from dollar
transactions in Iran," Schwechter said. "But here they are
giving banks a green light to go forward as long as they make
sure the dollar-denominated transactions don't affect the U.S.
It's a signal to blunt the criticism of the Iranian government
that they aren't getting any benefit from the nuclear deal."
David Mortlock, a former White House sanctions official,
said the guidelines were likely meant to clear up confusion that
had arisen this year over whether dollar transactions with Iran
were allowed at all under the terms of the nuclear deal.
"Do I think the administration wants to create as much
clarity as possible to sustain the deal? Yes, absolutely," said
Mortlock, now a partner at Willkie Farr & Gallagher LLP. "It is
a signal from OFAC and the administration that they do want to
A U.S. Treasury spokeswoman said on Monday the changes were
"intended to clarify the scope of sanctions lifting" under the
nuclear deal, and do not amount to additional sanctions relief
But Iran may not see the new guidance as enough to address
the hurdles to doing business. Hossein Ghazavi, a vice-minister
in Iran's economy ministry, said on Monday the changes still
left doubts for banks.
"The problems that existed before are still there," Ghazavi
said, according to the Iranian Students News Agency. "Previously
... non-American financial institutions could not have 100
percent confidence that while providing brokerage services,
creating accounts or maintaining U.S. dollars for Iranian banks
and customers, they wouldn't face unpredictable risk. This
ambiguity has still not been resolved."
Eric Lorber, a senior associate at the Financial Integrity
Network, which advises banks on sanctions, said that despite the
new guidance, major European banks are unlikely to enter Iran
"Among the largest banks there's still a serious reluctance
to do any of that business," Lorber said.
(Editing by James Dalgleish)