The international bank HSBC has criticized United States Secretary of State John Kerry for asking European banks to do more business with Iran’s regime while Washington continues to restrict American financial firms from doing the same.
The bank’s chief legal officer, Stuart Levey, said HSBC had no intention of doing any new business with the Iranian regime after a meeting in London on Thursday in which Kerry urged a gathering of European bankers to make a push into the country, Britain’s Guardian reported.
The U.S. and European Union lifted sanctions against the Iranian regime in January as part of a nuclear deal which included Tehran dismantling 14,000 centrifuges – two-thirds of its total nuclear capacity. Despite this, the banking industry remains fearful of large financial fines and the threat of losing crucial licenses to operate in the U.S., for falling foul of regulations, The Guardian wrote.
HSBC was fined $1.9 billion by the U.S. in 2012 for money laundering offences in relation to Mexico while Standard Chartered was fined $670 million for breaching sanctions with Iran. In 2014, French bank BNP Paribas was fined more than $8.8bn for breaching U.S. sanctions.
At Thursday’s meeting, Kerry had told representatives from all the major European banks that he wanted to “clarify and put to rest misinterpretations or mere rumors about how [the deal] is applied.”
But writing in The Wall Street Journal, Levey said the U.S. government was taking a “very odd position.”
“On the one hand, Washington is continuing to prohibit American banks and companies from doing Iran-related business … On the other hand, Mr. Kerry wants non-U.S. banks to do business with Iran without a U.S. repudiation of its prior statements about the associated financial-crime risks,” said Levey, who was the Undersecretary for Terrorism and Financial Intelligence at the U.S. Treasury Department between 2004 and 2011.
While a ban on the use of dollars in the U.S. banking system to finance Iranian trade is still in place, individual U.S. states are adapting to the changes in different ways.
Levey, who was not at the meeting with Kerry, said: “There are no assurances as to how such activity would subsequently be viewed by U.S. regulatory and law-enforcement authorities, which might seek to take enforcement action against banks that enter the Iranian market and run afoul of complicated U.S. restrictions. The State Department neither controls nor plays any meaningful role in the enforcement decisions of these authorities.”
“Washington has warned repeatedly that the Islamic Revolutionary Guard Corps controls broad swaths of the Iranian economy. The IRGC remains sanctioned by both the U.S. and the EU because of the central role it plays in Iran’s illicit conduct. When the U.S., EU, and U.N. removed sanctions from several hundred Iranian banks and companies, there were no assurances that the conduct of those banks and companies had changed.”
“This will present a challenge for European banks. HSBC is endeavoring to implement consistent and high standards across its global operations, designed to combat financial crime and prevent abuse by illicit actors. We have more work to do, but achieving that objective is one of our highest priorities. This approach is rightly expected by our regulators, including in the U.K. and the U.S.”
“Our decisions will be driven by the financial-crime risks and the underlying conduct. For these reasons, HSBC has no intention of doing any new business involving Iran.”
