Wednesday 14 September 2016 11:55 AM
NZ exports to Iran held back as banks fear hefty penalties
By Tina Morrison
Sept. 14 (BusinessDesk) - New Zealand's export trade with Iran hasn't picked up as hoped following the lifting of
sanctions in February because the country's banks are wary of potential fines or exclusions from the US banking system
should they fall foul of a quagmire of regulations and restrictions.
Along with other Western countries, New Zealand lifted sanctions against Iran in February after the country agreed to
roll back its nuclear ambitions. However, New Zealand's export trade to the Middle East's second-largest economy hasn't
stepped up despite the lifting of sanctions because banks are fearful they or their parent companies could face
penalties in the US, which would outweigh any benefits from doing business with Iran.
"Global sanctions on banks creates a complex environment for our members and the sanctions relating to Iran are no
exception," New Zealand Bankers' Association chief executive Karen Scott-Howman told BusinessDesk. “Despite the easing
of UN sanctions against Iran and the work that the government has already undertaken to help enable business between our
countries, banks are currently of the view that the situation requires them to proceed very cautiously."
New Zealand's banks have been in talks with the government and the US Treasury's Office of Foreign Asset Control on the
issue, however the roadblock isn't unique to New Zealand, with many international businesses, banks, and governments
also looking to see how some of the larger deals that have been slated with Iran can be transacted.
“An inadvertent breach of US, New York State, EU or other jurisdictions’ sanctions or anti-money laundering laws could
have significant consequences for a New Zealand bank and its US operations as well as correspondent banking
relationships," Scott-Howman said. "New Zealand banks are mindful that Iran has the potential to be a significant market
for some of their customers and are actively working closely with the government and the Ministry of Foreign Affairs and
Trade to identify potential solutions."
Merchandise trade data from Statistics New Zealand shows trading in some goods such as dairy products, wool, and seafood
continued throughout the sanction period. Some businesses have been able to export to Iran because their products fell
outside the old sanctions regime or because their banks have been able to conduct significant due diligence.
“Banks continue to monitor the global situation closely and are well positioned to respond should it change,"
Scott-Howman said. "If customers are looking to export or do business in Iran they should talk to their bank who will
work with them on a case by case basis."