The series of agreements started in August with a number ofcredit lines issued to Iran, including 8 billion euros extended bySouth Koreas Export-Import Bank (Kexim), followed by a $10 billion line byChina. The process continued when two mid-sized European banks, Austrias Oberbank and Danish Danske Bank, signed framework agreements with Iranian entities tofinance the exportsof Austrian and Danish companies to Iran. Similar agreements are in the works with Japan and Italy. Furthermore, the Central Bank of Iranand the Export Insurance Agency of Russia (EXIAR) have also signed a memorandum of understanding to finance joint projects between the two countries.
The above developments mean that most of Irans major trading partners are engaged in facilitating the financing of projects a main area where Tehran was facing limitations since the lifting of thenuclear-related sanctionsin January 2016. Indeed, international companies exporting to Iran have faced major challenges in financial transactions, mainly due to the hesitation of global first-tier banks to engage the Iranian market. This hesitation was partly due to the changing legal framework in international banking and partly due to concerns over existing or future US sanctions against Iran. Part of the problem is that a number of major European banks that have been fined by the US authorities for past transactions with Iranhave also committedto not engaging in business with Iranfor a certain period. In the meantime, the moreantagonistic tonesfrom Washington will create further disincentives for global banks to consider Iran-related transactions.
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