German companies in Iran call for creation of new payment system to avoid U.S. sanctions

Source: Xinhua| 2018-08-06 20:17:20|Editor: zh
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BERLIN, Aug. 6 (Xinhua) -- German companies operating in Iran have appealed to the federal government on Monday to help develop a new international payment system between the European Union (EU) and the Middle Eastern country in response to recently-announced U.S. sanctions.

"As representatives of German business, we appeal to minister for the economy Peter Altmaier, the entire federal government and the European Union (EU) Commission to find ways for safe payments processing in Iran", a statement by Dagmar von Bohnstein, German business delegate in Iran, read.

Von Bohnstein emphasized that German companies in Iran were in urgent need of political solutions which enabled them to complete financial transactions while bypassing U.S. capital markets. "The biggest problem (faced by firms in the wake of Washington's departure from the Iran nuclear accord) is to find corporate banking providers which can complete transactions with Iranian counterparties without being penalized by U.S. sanctions."

Back in May, U.S. president Donald Trump announced an abrupt U-turn on the Iran nuclear accord signed by his predecessor Barack Obama and vowed to reimpose earlier sanctions against the country as soon as August. Following a traditional pattern adopted by U.S. governments to exert economic pressure on states considered as geo-political adversaries, Washington plans to strip Iranian companies of their access to the globally-dominant U.S. financial sector.

Aside from barring Iranian firms from acquiring dollars as a reserve currency, or as a monetary unit to invoice and settle international trade, even foreign financial institutes which have subsidiaries in the U.S. will be hit by sanctions unless they refuse to become involved in any transactions with counterparties from Iran.

Most European banks have consequently begun winding down their operations in Iran for fear of losing access to U.S. capital markets as a punishment, depriving German exporters of liquidity needed to conduct business with the country.

In June, European governments attempted to no avail to secure exemptions for their companies from U.S. sanctions against Iran. A growing number of business representatives in the EU have since urged policymakers in Brussels to instead set up an independent credit institute without any connections to the U.S. financial system with the specific purpose of processing euro-denominated trade with and investments in Iran without falling foul of U.S. sanctions.

German companies have repeatedly criticized Trump's decision to backtrack on the Iran nuclear accord, urging Berlin to do everything in its power to save the landmark international agreement reached by the U.S., China, Russia, Germany, France and the United Kingdom in 2015.

The Federation of German Wholesale and Foreign Trade (BGA) has estimated that the volume of German-Iranian trade grew by 42 percent to a total of 3.4 billion euros (3.9 billion U.S. dollars) in 2017 after sanctions were first loosened in 2016.