American Pressure Threatens UK Firms

Christine Seib, Times Online:

The US Government is putting Britain’s £1 billion annual trade with Iran at risk by pressing European banks to withdraw from the country, The Times has learnt. The Middle East Association (MEA), which represents 75 per cent of British businesses that trade in the region, accused American officials of “mucking up British business”. READ MORE

Michael Thomas, the director-general of the MEA, said: “The banks are coming under pressure from the US Government and it’s irritating that the Americans are taking this stance because, as far as the UK is concerned, it’s still perfectly legal to trade with Iran and Iran is a major buyer of UK goods.

“What the US is doing isn’t hurting Iran, because Iran can get whatever it wants from the Gulf or the Far East, but British traders are finding it difficult to get funding from the banking system in the UK.”

Iran is the Middle East’s third-largest consumer of British products, buying £460 million of goods directly from the UK every year and purchasing a further £600 million worth from Dubai, which acts as a “wholesaler” of Western goods to the Middle East.

The United Nations Security Council has not imposed economic sanctions on Iran, despite concerns that the country’s uranium enrichment programme is a precursor to developing nuclear weapons. European negotiators met in London this week to discuss incentives that could be used to convince Iran to halt its pursuit of nuclear power. Further talks are expected.

However, US government officials are thought to be forming an unofficial trade embargo on Iran by putting pressure on European banks with significant American businesses to reconsider their presence in Iran. The United States has a number of laws that ban companies that operate in America from working in any country that is declared a terrorism sponsor.

Since January three European banks — UBS, Credit Suisse and ABN Amro — have curtailed their activities in Iran. The banks said that their decisions to cut back had been business ones.

Stuart Levey, the US Treasury’s Under-Secretary for Terrorism and Financial Intelligence, welcomed the banks’ move: “Financial institutions are beginning to re-evaluate their dealings with Iran and questioning whether or not it is in their best interest to maintain a business relationship with a regime that sponsors terrorism and the proliferation of weapons of mass destruction.”

Mr Thomas said that British businesses were now obtaining finance from Iranian banks such as Bank Melli, Bank Sepah and a growing number of private Iranian banks that had been set up to cover the shortfall.

The MEA, which two weeks ago took a delegation of 19 British business people to Tehran to establish trade links, will hold a conference on Iran on June 8.

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