[A-List] Iranian Bank Shrugs Off Cost of US Sanctions

["Yoshie Furuhashi" <critical.montages@xxxxxxxxx>]

<http://www.ft.com/cms/s/0/7422c7a0-baf4-11dc-9fbc-0000779fd2ac,dwp_uuid=be75219e-940a-11da-82ea-0000779e2340.html>
Iranian bank shrugs off cost of US sanctions

By Najmeh Bozorgmehr in Tehran and Daniel Dombey in Washington

Published: January 4 2008 22:25 | Last updated: January 4 2008 22:25

Unilateral sanctions by the US have cost Iran's Bank Saderat a third
of its foreign partners but its overseas operations remain profitable,
according to the institution's managing director.

In an interview with the Financial Times, Hamid Borhani said that of
600 foreign banks that used to do business with Bank Saderat before
the US imposed sanctions in September 2006, some 200 had halted their
transactions. The bank is the second largest domestically in terms of
assets and probably the most active Iranian bank outside the country.

Mr Borhani said that Middle Eastern banks were continuing contacts and
becoming the institution's top foreign partners, as sanctions shifted
trade from west to east. China became Iran's main trade partner last
year, while much trade is being conducted through the re­export hub of
the United Arab Emirates.

"It is customers who determine which direction the bank should go," Mr
Borhani said.

However, according to recent figures from Bankers' Almanac, which
provides reference information for the industry, the number of
Saderat's correspondent banks has declined from 29 in August 2006 to
eight, two of which are Saderat subsidiaries. Correspondent banks are
banks that agree to perform services for other banks in inaccessible
markets.

"The trend line is in the right direction but it hasn't yet gone to
zero, where it should be," said a senior US official.

Western officials also said that Saderat might be a ­target of the
next round of United Nations sanctions, although the US has failed to
persuade Russia and China to sign up to measures.

Mr Borhani said the bank's 25 operations outside the country,
including a subsidiary in London, Washington's closest ally, continued
their operations. He estimated profits were up about 25 per cent in
2007, compared with a 30 per cent rate of growth the previous year.

Washington has taken action twice against Bank Saderat over the past
15 months. It amended regulations in September 2006 to exclude the
bank from the US financial system and subsequently designated it as a
"supporter of terrorism" last October.

The US administration has lobbied for banks and companies in other
countries to stop doing business with the Iranian institutions it has
targeted.

Mr Borhani, however, insisted that his bank was managing the pressure
and remained determined to keep overseas branches running because
there were no signs of losses being made.

He said sanctions would not stop the bank's forthcoming privatisation.
Nor had it prevented development plans, particularly the introduction
of electronic and internet banking.

US claims that Saderat funded radical groups were baseless, he said.
The London-based Bank Saderat, which holds strategic investments, and
the bank's five branches in Lebanon had never transferred money to
militant groups, as the US alleges.

He challenged Washington to reveal its documentation and reply to the
three letters he had sent to the Treasury's Office of Foreign Assets
Control along with documents, in one case exceeding 1,000 pages.

-- 
Yoshie
<http://montages.blogspot.com/>