Exporters welcome lifting of sanctions
Banks ‘reluctant’ to support business in Iran
Life sciences, technology, university and professional service sectors in Scotland are among those expected to benefit from the easing of restrictions, said Tom Stocker (pictured), an Edinburgh-based partner at Pinsent Masons.
But he warned that the scope of EU sanctions and particularly the extra-territorial nature of US sanctions, caused “significant difficulties and banks generally declined to support Iranian business.”
Mr Stocker, who is a member of his firm’s regulatory and business crime team, said that 29 individuals and 94 companies remain on the EU’s sanction list and transactions connected with them remain prohibited, while export controls on military and dual-use items are also in place.
He added: “The biggest challenge to Iranian related business is the US regime. The US has lifted sanctions that apply to non-US persons but US businesses remain prohibited from engaging in Iranian related business and 200 entities remain subject to US sanctions. Money connected to Iranian business must also not be transferred or cleared through the US.”
Companies are getting involved in third party payment routings to distance payments to themselves from payments originating in Iran but that leads to money laundering risks, said Mr Stocker.
“There therefore remains substantial legal risks connected to Iranian business, but those risks can be navigated. There is a need to carry-out counterparty due diligence and to avoid transactions being in US dollars.
“The key challenge for Scottish business will be the practical one of whether their banks will process payments and confirm letters of credit. The risk appetite of western banks is likely to lag behind the lifting of the EU sanctions because the US trade embargo remains in place.”