Switzerland has become the first country to lift sanctions on Iran in the wake of its historic accord with world powers to curb its nuclear programme.
But the Swiss move is not likely to lead to the country’s giant commodity traders to handle the Islamic Republic’s oil any time soon according to analysts.
Switzerland, on 12 August 2015, became the first country to lift sanctions imposed on Iran after its historic agreement with world powers on 14 July 2015 on its nuclear programme.
The Swiss government specifically lifted a ban on precious metals transactions with Iranian state bodies and the requirement to report trade in Iranian petrochemical products, according to the statement issued by Switzerland’s Federal Council.
Trading barriers removed
The statement also removes an obligation to report the transport of Iranian crude oil and petroleum products and rules on insurance and reinsurance policies linked to such transactions.
This means that Switzerland’s giant commodity traders – including Glencore, Trafigura and Vitol – could, under Swiss law at least, resume dealings with Iran.
But the traders, along with a substantial number of the banks they use, must still abide by restrictions imposed by US and EU sanctions that prohibit dealing in Iranian crude.
“As long as they stay in force the practical consequences for the trading houses operating in Switzerland is precisely zero,” Matthew Parish, managing director of Gentium Law in Geneva told media.
Longer term benefit
But even if Switzerland’s ending of sanctions on Iran has no immediate impact, the giant commodity traders and other Swiss businesses may yet benefit by their government’s swift actions.
Swiss companies may be perceived by potential Iranian counterparties to be, in common with the Swiss government, very keen to re-establish or build new trade and investment links with the Islamic Republic.
A statement outlining the rationale behind the Swiss government’s ending of sanctions on Iran can be found here.
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