After a series of negotiations and follow-ups by Iranian officials and investment companies, the head of Iran-Italy Chamber of Commerce announced that the remaining banking issues between the two countries will be resolved within two months.
“Unfortunately, two years after Iran’s nuclear sanctions have been cleared, the volume of trade with Italy has not bounced back to its pre-sanctions’ level. Banking obstacles and lack of insurance coverage are the main reasons behind it,” Ahmad Pour-Fallah was also quoted as saying by IRNA.
The volume of Tehran-Rome trade was about €7 billion in 2010, making Italy the largest trading partner of Iran among European nations. But the enforcement of international sanctions on Iran made it hard for Italy to maintain the high level of economic transactions and bilateral trade fell to €1.6 billion in 2014.
The head of the joint chamber hoped that after banking issues between the two countries are resolved, bilateral trade would exceed €7 billion.
Pour-Fallah is leading an Iranian delegation to attend the joint Business Forum on Banking, Insurance and Legal Issues, which was held on Wednesday in Rome. The delegation consisted of 25 representatives from industrial, mining, banking and insurance sectors.
“We have come here to negotiate with Italian bankers and insurance official to solve the problems as soon as possible and this is also an opportunity for Italian businesses to expand their economic relations with Iran,” he added.
This is while the co-chair of Iran-Italy Chamber of Commerce believes that things have significantly improved compared to two years ago.
“Italian firms are currently determined to work with Iran but due to a complicated banking system influenced by US-based banks, international and Italian major lenders still cannot engage in financial relations with Iran,” Pier Luigi d'Agata added.
D'Agata noted that the event has been an important event with an Iranian delegation comprising representatives of banks, insurance and commercial companies coming to Italy to assess different aspects of economic activities and financial relations.
The head of Bank Sepah’s Rome branch also attended the forum, in which he said his bank, with the help of Iranian Embassy in Italy managed to acquire the operation license from the Italian monetary authority and now is ready to offer all kinds of financial services.
“We have good relations with Italian banks like Banca Monte dei Paschi di Siena. Since Iran’s nuclear accord, we have received more than €1.5 billion worth of credit lines and allocated them to our customers who are mostly Italian and this is while the volume of LOCs are predicted to exceed €3 billion by the end of 2017,” Faramarz Ghamkhar added.
He noted that Bank Sepah’s Rome branch has also transferred around €1.5 billion worth of foreign exchange remittances from Iran to Italy, which indicates there is no problem in sending money from Iran to Italy.
“Due to the request of our Italian customers, we issued a number of banking guarantees and long-term letters of credit for them, despite the fact that we had some problems in transferring the funds to our Iranian source. So we had to negotiate with a few other Italian banks and managed to find other ways of getting the job done,” Bank Sepah’s official concluded.
Ghamkhar noted that with the support of Italian monetary and financial officials, “we are ready to offer all kinds of financial services and we have no problem in complying with international anti-money laundering regulations as they also reduce the risks of our activities”.
The representative of Banca Monte dei Paschi di Siena was also present in the forum and noted that before Iran’s nuclear sanctions, their bank was handling more than 60% of financial transactions between Iran and Italy.
“Since the sanctions have lightened, we have opened accounts for a number of Iranian banks and traded some SWIFT codes with them. I announce that we are completely ready to offer all kinds of banking services to Iranians,” Marco Fasolo added.
Bilateral trade between Iran and Italy in the first three months of 2017 stood at €1.2 billion, making Italy the biggest trading partner of Iran in the European Union over the period.