DVB Bank is listed as a confirmed participant at the Iran Aviation Finance Summit that took place from September 18-19, 2016 in Tehran, Iran. (Confirmed Participants)
Germany agreed to provide Iran with a 1.2 billion euro ($1.27 billion) credit line to help finance a rail project , according to an official at the Central Bank of Iran. The facility -- through state-run lender KfW IPEX -- will help fund the development of the Tehran to Mashhad railway, the official said, asking not to be identified. German banks have also agreed to help fund power stations in the country, he said. Iran has struggled to raise foreign financing for tens of billions of dollars worth of infrastructure projects it hoped it could get started after sanctions were eased 10 months ago. Large European banks have mostly kept their distance, worried that they could fall afoul of remaining U.S. sanctions, Iranian officials have said... The funding has been agreed in principle and is close to being finalized, Michael Tockuss, chairman of the Germany-Iran Chamber of Commerce, said in an interview in London, adding it would be the biggest credit line Iran has secured from foreign sources since the easing of sanctions in January. (Bloomberg News, "Germany's KfW Agrees on 1.2 Billion-Euro Iran Rail Loan," 11/28/2016).
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Despite hopes of a new dawn for Iran's economy after nuclear-related sanctions were lifted, major Western banks are reluctant to do business with the Islamic republic for fear of US retribution. President Hassan Rouhani has said that to reach the target of eight-percent growth needed to modernise the industrial sector and relaunch the hobbled economy, Iran needs up to $50 billion in foreign investment every year. But without the big foreign banks, that looks impossible. "For the moment, the little European banks have agreed to work with us," said Parviz Aghili, head of the private Middle East Bank in Tehran. They include banks from Italy, Austria, Switzerland, Germany and Belgium, he said without naming them. "But not a single medium-sized or big bank has so far agreed to do it," he added... The limited number of institutions that do deal with the Islamic republic include Raiffeisen Bank and Erste Bank from Austria, Mediobanca and Banco Popolare of Italy, Germany's EIH, KfW and AKA banks, Belgium's KBC, ING of the Netherlands and Turkey's Halk, according to a banking expert in Tehran. "These banks have established working relations with the Iranian banks to open letters of credit for fairly small sums of 10, 20 or 50 million dollars." But they lack the resources to finance big projects like the deal struck between Iran and European aircraft manufacturer Airbus for 118 airplanes, or oil and gas development projects, the expert said. (AFP, "Iran banking hobbled by Western reluctance to engage," 9/13/2016).
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Dr. Christian Staab, representing KfW-IPEX, plans to be a part of a German trade delegation travelling to Iran. (Iran Chamber of Commerce, Industry, Mines, and Agriculture Website, “Preliminary profile list of companies: German Economic Delegation to Iran”).
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“The Iranian Bank of Industry and Mines and the German KfW Development Bank have agreed to cooperate extensively after the removal of the sanctions.” (Iran Business News, “German, Iranian Banks to Cooperate,” 11/29/2015).
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KfW-IPEX Bank is “observing the situation [in Iran] very closely.” (Handelsblatt, “Banks Slow German Return to Iran,” 7/7/2015).
"Belgium’s KBC (KBC.BR) will limit Iran-related transactions to only humanitarian trade after the U.S. decision to reimpose sanctions on Tehran, the financial group said, becoming the latest company to scale back activities." (June 7, 2018).
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On May 9, 2018, the Wall Street Journal reported that several European banks, “including Belgian bank KBC Group NV signed letters of credit for companies that do business in Iran but this was restricted to non-U.S. dollar trade only… A spokeswoman for KBC said the bank was reviewing the decision by the Trump administration.” (Wall Street Journal, “Iran Nuclear Deal Upheaval Shakes Up European Banks’ Outreach,” 5/9/2018).
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"EDBI’s top official named Belgium’s KBC bank as another major European bank that has good ties with Iranian banks." (September 2017)
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"Despite hopes of a new dawn for Iran's economy after nuclear-related sanctions were lifted, major Western banks are reluctant to do business with the Islamic republic for fear of US retribution. President Hassan Rouhani has said that to reach the target of eight-percent growth needed to modernise the industrial sector and relaunch the hobbled economy, Iran needs up to $50 billion in foreign investment every year. But without the big foreign banks, that looks impossible. "For the moment, the little European banks have agreed to work with us," said Parviz Aghili, head of the private Middle East Bank in Tehran. They include banks from Italy, Austria, Switzerland, Germany and Belgium, he said without naming them. "But not a single medium-sized or big bank has so far agreed to do it," he added... The limited number of institutions that do deal with the Islamic republic include Raiffeisen Bank and Erste Bank from Austria, Mediobanca and Banco Popolare of Italy, Germany's EIH, KfW and AKA banks, Belgium's KBC, ING of the Netherlands and Turkey's Halk, according to a banking expert in Tehran. "These banks have established working relations with the Iranian banks to open letters of credit for fairly small sums of 10, 20 or 50 million dollars." But they lack the resources to finance big projects like the deal struck between Iran and European aircraft manufacturer Airbus for 118 airplanes, or oil and gas development projects, the expert said." (AFP, "Iran banking hobbled by Western reluctance to engage," 9/13/2016).
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According to an email sent by KBC on April 5, 2016, they have decided to support “well-established customers .…… in their genuine trade with Iran, respecting all U.S. and EU regulation.” (Bloomberg, “Europe’s Banks Are Staying Out of Iran,” 5/2/2016).
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KBC “confirmed … that they have started handling transactions on behalf of European clients doing business in Iran.” KBC stated that it had established correspondent relationships with “several state-owned and private Iranian banks.” (Financial Times, “Europe’s banks begin tentative return to Iran,” 4/3/2016).
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KBC participated in a November 2015 seminar, “Doing Business in Iran.” (Flanders Today, “Flemish officials and companies gear up for business with Iran,” 2/24/2016).
Erste never signed any contracts with Iranian banks as part of its mooted correspondent bank network, according to a spokeswoman. (" Max Colchester and Laurence Fletcher, “Iran Nuclear Deal Upheaval Shakes Up European Banks’ Outreach,” The Wall Street Journal, May 9, 2018.")
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Austrian and Iranian bankers met in Vienna in September to discuss the resumption of trade financing, people with knowledge of the plans said at the time. Austria’s top three banks, Erste Group Bank AG, UniCredit Bank Austria AG and Raiffeisen Bank International AG would be among the participants, according to the people, who asked not to be identified. (Bloomberg News, "Three Foreign Banks to Open in Iran, Central Bank Official Says," 11/1/2016).
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"Austrian and Iranian bankers are meeting in Vienna on Wednesday to discuss the resumption of trade financing, people familiar with the discussion said... Austria’s top three banks Erste Group Bank AG, UniCredit Bank Austria AG and Raiffeisen Bank International AG are all among the participants, the people said." (Bloomberg ,"Iranian Bankers Said to Meet Austrians to Resume Commercial Ties," 9/28/2016)
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"Despite hopes of a new dawn for Iran's economy after nuclear-related sanctions were lifted, major Western banks are reluctant to do business with the Islamic republic for fear of US retribution. President Hassan Rouhani has said that to reach the target of eight-percent growth needed to modernise the industrial sector and relaunch the hobbled economy, Iran needs up to $50 billion in foreign investment every year. But without the big foreign banks, that looks impossible. "For the moment, the little European banks have agreed to work with us," said Parviz Aghili, head of the private Middle East Bank in Tehran. They include banks from Italy, Austria, Switzerland, Germany and Belgium, he said without naming them. "But not a single medium-sized or big bank has so far agreed to do it," he added... The limited number of institutions that do deal with the Islamic republic include Raiffeisen Bank and Erste Bank from Austria, Mediobanca and Banco Popolare of Italy, Germany's EIH, KfW and AKA banks, Belgium's KBC, ING of the Netherlands and Turkey's Halk, according to a banking expert in Tehran. "These banks have established working relations with the Iranian banks to open letters of credit for fairly small sums of 10, 20 or 50 million dollars." But they lack the resources to finance big projects like the deal struck between Iran and European aircraft manufacturer Airbus for 118 airplanes, or oil and gas development projects, the expert said." (AFP, "Iran banking hobbled by Western reluctance to engage," 9/13/2016).
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"European banks are tentatively re-engaging with Iran as the Middle East’s second-largest economy slowly emerges from a sanctions regime that has kept it in the financial wilderness for years. Belgium’s KBC, Germany’s DZ Bank both confirmed when contacted by the Financial Times that they have started handling transactions on behalf of European clients doing business in Iran. Austria’s Erste Bank is preparing to do so. However, bigger European banks remain on the sidelines alongside their US rivals, scarred by a string of multibillion-dollar fines for earlier sanctions breaches in Iran. This is causing growing frustration among officials in Iran and Europe about the slow pace with which Tehran is being reconnected to the global financial system." (Financial Times, “Europe’s banks begin tentative return to Iran,” 4/3/2016)
"In February 2017, an Azerbaijani bank will open its branch in Iran, Economy Minister Shahin Mustafayev told a press conference on the outcome of an Azerbaijani delegation’s visit to Iran. "
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"Russia and Iran agreed to strengthen transport connections, including a potential railway link through Azerbaijan that would aim to grab a share of the cargo now being shipped through the Suez Canal. Russian President Vladimir Putin and his Iranian counterpart, Hassan Rouhani, discussed the plan during a rare joint visit to Azerbaijan on Monday. The fight against terrorism and maritime boundaries in the Caspian Sea were also among the topics of discussion... Azeri President Ilham Aliyev has offered to help finance the so-called North-South transportation corridor, which he touted as a project of 'great importance' in connecting Europe and Asia. Rouhani earlier said Azerbaijan had agreed to provide half of the funding needed to extend the Iranian rail network to the Azeri border... Russia would be able to use the new route to export goods to Asian markets and the Gulf region, Elxan Shahinoglu, head of the Atlas research center in Baku, said by e-mail. It would also provide a shorter passage for Iranian goods to northern and eastern Europe, he said... The state-owned International Bank of Azerbaijan will lend Iran $500 million to extend the Iranian network to the border, Trend news service reported in June, citing Ali Noorzad, head of the Iranian Co. for Construction and Development of Transportation Infrastructure. Talks continue on the loan agreement, Noorzad said, adding that the estimated cost of the project is $1.1 billion." (Bloomberg, "Russia, Iran Consider Rail Link to Snag Share of Suez Traffic", 8/8/2016).
AKA Bank has agreed to attend the Marktchancen Iran conference (the “Conference”) in Frankfurt on November 28-29, 2016. According to its official website, the Conference is being organized to share information about export financing for Iran including, “[s]trategies to enter the Iranian market, Iran sanctions, Requirements (export controls and compliance), the Banking sector, Financial transactions, and Influence of the different institutions in Iran.” (Marktchancen Iran Website, “Home”).
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"German bankers have expressed enthusiasm in establishing normal banking links with Iran, the governor of the Central Bank of Iran says...Last week, Seif met with Jens Weidmann, the President of the Deutsche Bank to discuss ways to enhance banking cooperation between the Frankfurt-based lender and Iranian banks. He also met with presidents of AKA Bank and DZ Bank." (Financial Tribune, "Senior Bankers Review Int’l Prospects, Future Plan of Action," 07/21/2016).
"The deputy head of Iran Railways announced today that a $2.4bn letter of credit was ready to be drawn for work on the high-speed rail line between Tehran and Isfahan, the Mehr News Agency reports. Noorollah Beyranvand said the money, being loaned by the Export-Import Bank of China, was ready to be paid to China Railway Engineering Corporation (CREC), the company due to carry out the work. Other companies involved are Khatam Al-Anbia Construction, which is owned by Iran’s Revolutionary Guard, Germany’s Siemens, and Italferr, the consulting arm the Italian national rail operator Ferrovie dello Stato." (Global Construction Review, " 6/10/2019).
Iran signed a contract with CREC to build Iran’s first high-speed line in 2015, and agreed the loan in July 2017. The project is expected to cost at least $1.8bn.
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"China’s Exim Bank (the Export-Import Bank of China) penned a contract with Iran’s Bank of Industry and Mine to finance $1.5 billion for signaling of Tehran-Mashhad railroad, IRIB news reported." (July 25, 2017)
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"CBI deputy governor has reported on attraction of financial resources worth 7.2 billion dollars through three international banks. Deputy Governor of the Central Bank of Iran (CBI) for Foreign Exchange Affairs Gholamali Kamyab, while pointing to foreign exchange projects pursued by CBI in the field of Resistance Economy, said attraction of 10 billion dollars of external resources remained as one objective defined by the central bank in the area of Resistance Economy. 'Measures taken by CBI in this regard include extensive negotiations with some foreign banks like Export-Import Bank of China (China Eximbank), the Italian Mediobank as well as Danske Bank of Denmark,' noted the official." (Mehr News, "Iran Attracts $7.2bn Finance From 3 Foreign Banks," 1/8/2017).
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"Iran says it has signed two memorandums of understanding (MoUs) with two major Chinese banks to provide loans for its key development projects. The banks that will provide the loans to Iran are the Export-Import Bank of China (EXIM) and China Development Bank (CDB). They signed the MoUs with Iran during a visit to Beijing by the country’s Minister of Economy and Financial Affairs Ali Tayyebnia. EXIM had already signed another basic agreement with Iran to finance a high-speed train service between Iran’s capital Tehran and Mashhad in the north-eastern province of Khorasan Razavi. The bank signed the agreement with Iran’s Ministry of Roads and Urban Development in January. Tayebnia arrived in Beijing on Monday at the head of a high-ranking delegation to participate the 16th meeting of the Iran-China joint economic commission, which was held on Tuesday and Wednesday. The Iranian minister later met China’s Vice Premier Wang Yang who urged Iran to take their bilateral cooperation to the next level." (PressTV, "China seals deals to award loans to Iran," 08/18/2016).
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Central Bank of Iran (CBI) will open two euro and yuan accounts in Exim Bank of China in order to facilitate settlement of banking transactions. (“CBI to open accounts in Exim Bank of China,” Mehr News Agency (Iran), August 17, 2016.)
Central Bank of Iran (CBI) and China Development Bank (CDB) inked a cooperation agreement worth 15 billion euros to provide financing facilities for development projects. (September 16, 2017).
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September 2017 - In addition to the credit line, the Export–Import Bank of China committed to a further $10 billion in loans, while the China Development Bank signed preliminary deals with Iran for $15 billion in infrastructure and production projects, Seif announced.
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"Iran says it has signed two memorandums of understanding (MoUs) with two major Chinese banks to provide loans for its key development projects. The banks that will provide the loans to Iran are the Export-Import Bank of China (EXIM) and China Development Bank (CDB). They signed the MoUs with Iran during a visit to Beijing by the country’s Minister of Economy and Financial Affairs Ali Tayyebnia. EXIM had already signed another basic agreement with Iran to finance a high-speed train service between Iran’s capital Tehran and Mashhad in the north-eastern province of Khorasan Razavi. The bank signed the agreement with Iran’s Ministry of Roads and Urban Development in January. Tayebnia arrived in Beijing on Monday at the head of a high-ranking delegation to participate the 16th meeting of the Iran-China joint economic commission, which was held on Tuesday and Wednesday. The Iranian minister later met China’s Vice Premier Wang Yang who urged Iran to take their bilateral cooperation to the next level." (Press TV, "China seals deals to award loans to Iran," 08/18/2016).
"South Korea's finance minister said on Thursday his country will start trading with Iran using the euro on Aug. 29. 'It will be implemented from next Monday,' Yoo Il-ho told reporters in Seoul, referring to a decision which will allow trade between the two nations to be settled in the euro. The move 'will greatly resolve obstacles that stood in the way of facilitating investment and trading with Iran,' Yoo said, and added that KEB Hana Bank, Shinhan Bank and Woori Bank have been selected as settlement banks. Up till now, South Korea's purchases of Iranian oil and payments for construction projects in Iran have been settled in the won, restricting business activities even after the lifting of Western sanctions against the Middle Eastern country." (Reuters, "South Korea to start trading with Iran in euro on Aug 29," 08/25/2016).
"Enterkhab, owned by Iran’s Mohammad Reza Dayyani, recently got international court approval at Rotterdam, the Netherland, to seize assets of Samsung Electronics, LG Electronics, KEB Hana Bank and others, according to officials.
The compensation dispute between the Iranian company and the Korean government dates back to 2010, when the Dayyani family -- largest shareholder of Iranian home appliance seller Enterkhab -- failed to acquire Daewoo Electronics.
Selected as a priority bidder to acquire the electronics company, Entekhab paid 57.8 billion ($51.5 million) as a 10 percent down payment. But creditors later annulled the deal, citing the lack of transparency in financing plans and refused to pay back the money.
Suspecting that the Korean government wrongfully interfered in the transaction, under pressure from Washington, Dayyanis filed an investor-state dispute lawsuit." (Korea Herald, "Iranian firm likely to seize assets of Korean firms amid dispute," 8/20/2019).
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"KEB Hana Bank is facing an investigation for possible human rights violations after the bank was found to have requested its Iranian customers to close their bank accounts, according to the National Human Rights Commission (NHRC) Friday...KEB Hana Bank said it requested dozens of its Iranian customers here to close their banks via email and telephone between the end of September and Oct. 12.The lender has also suspended deposit and withdrawal services for Iranian customers here since Oct. 31." (Korea Times, "KEB Hana Bank under probe for discriminating against Iranian customers," 11/9/2018).
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“According to Iranian Embassy in South Korea, Iranians can open bank accounts from October 5 in all branches of KEB Hana Bank and Woori Bank and carry out banking transactions,” Pooya Firoozi was quoted as saying." (Financial Times, "Iran's Banking Problems With South Korea Resolved," 10/9/2018).
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"South Korea's finance minister said on Thursday his country will start trading with Iran using the euro on Aug. 29. 'It will be implemented from next Monday,' Yoo Il-ho told reporters in Seoul, referring to a decision which will allow trade between the two nations to be settled in the euro. The move 'will greatly resolve obstacles that stood in the way of facilitating investment and trading with Iran,' Yoo said, and added that KEB Hana Bank, Shinhan Bank and Woori Bank have been selected as settlement banks. Up till now, South Korea's purchases of Iranian oil and payments for construction projects in Iran have been settled in the won, restricting business activities even after the lifting of Western sanctions against the Middle Eastern country." (Reuters, "South Korea to start trading with Iran in euro on Aug 29," 08/25/2016).
Eye on Iran is a news summary from United Against Nuclear Iran (UANI), a section 501(c)(3) organization. Eye on Iran is available to subscribers on a daily basis or weekly basis.