On our web site, you will find information about doing business with Iran, the role of The British Iranian Chamber of Commerce, our counterpart in Tehran, as well as details about services and membership.
British Airways Suspension of Flights to Iran
'British Airways' announcement that it is suspending flights to Iran from 23 September hardly comes as a surprise. On 7 July KLM had announced its own decision to suspend flights from September, and Air France did likewise yesterday. In all cases, the national carriers have attributed the decision to commercial reasons.
While the struggling Iranian economy is likely to result in a reduction in demand at some point, it is clear that both the economic difficulties and the airlines' decisions are a direct result of unilateral US political measures - IE the re-imposition of sanctions.
The National carriers are of course not alone in taking the decision to withdraw. French oil giant Total and several auto companies have similarly withdrawn, but National Carriers are a particularly visible indication of the trend, impacting the direct flow of business travel between Iran and Europe. In this respect, the consequences of the US decision are perhaps unprecedented. The pre-JCPOA sanctions were, of course, multilateral, being applied by the UN, EU and individual European states. In those cases, national carriers had no choice but to suspend flights consistent with direction from their own governments.
Now, however, the national carriers are complying with measures imposed unilaterally by the US. This perhaps says much about the continuing importance of the US as one of the biggest markets in the world. But, if the US is able to exercise such direct influence on the commercial activities of other countries in this case and force compliance, it begs the question whether European companies will be forced to comply with other unilateral U.S. decisions as and when Washington decides.'
Lord Lamont of Lerwick - August 2018
Transacting with Iran - New Initiatives
BICC understands the Government and its European partners are working on three initiatives to support transactions with Iran and for this purpose, the E3 and Iran have formed a number of working groups.
The first initiative relates to consumer goods and would seek to enhance existing commercial banking relationships between Europe and Iran to maintain payment for consumer goods including food, medical and agricultural goods. The idea is to facilitate European banks processing payments of certain chosen identified Iranian banks. The Government is working with the US to get additional assurances for banks and bring some legal certainty into the situation. This would focus on the Iranian banks most active in consumer goods, are connected to SWIFT and have active correspondent banking relationships to Europe. All this would be done in accordance with regulatory standards particularly relating to AML and CFT.
The second initiative is a Special Purpose Vehicle (SPV), essentially a netting mechanism, which will reduce the number of cross-border payments by enabling businesses to settle debts and payments from Iran between themselves. This could be of particular use to Iran in getting paid for its oil.
The third initiative is a development of the second and is a larger SPV that will still be a netting mechanism but will have a banking licence to process payments itself. The SPV would eventually become a paying agent or bank, in which EU businesses could have an account, and it would have relationships with Iranian banks. It would be open to Non-EU companies as well and would be regulated and supervised. The UK is fully involved in these discussions, will be a participant and it is assumed will continue to be so even after the UK leaves the EU.
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BICC requires all Members, as a term of Membership, to observe applicable UN, EU and UK sanctions and recommends that they take account of US and other sanctions law where it might affect them directly or indirectly.
BICC is able to provide understanding of the sanctions and help in compliance.
For a comprehensive view on this subject, please go to our trade restrictions page.
An important plenary session of the Financial Action Task Force (FATF) will take place in October during which Iran's compliance with FATF requirements will be considered. The FATF had set out 9 actions which Iran had to complete to avoid being blacklisted by FATF. These actions 'range from specific elements of enhanced due diligence and systematic reporting of transactions involving the jurisdiction, to a limitation or prohibition of financial transactions within the jurisdiction.'
There has been substantial media coverage on these requirements because failure to comply could further reinforce Iran's isolation from the international financial systems. At the time of writing (27th September 2018), a high - level Iranian delegation was in Rome to present to the FATF its progress report on these requirements.
Broadly speaking, the actions relate to the following Iranian national laws and international agreements.
Amendments to Iran's national law:
Iran is required to ratify the following two international agreements:
Some reports from within Iran have indicated that the Supreme Leader has approved these amendments. Although there are still details to finalised under points 2 and 4 above, it is clear that the Iranian side is making strenuous efforts to complete these tasks and to conform to FATF requirements within the timeline.
It is expected that the FATF will make its decision on Iran's compliance on the 19th October, the final day of the plenary session.