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Washington has called on international financial institutions to steer clear of doing business with Iran’s central bank, in the US’s most wide-ranging attempt yet to isolate Tehran financially.
The Treasury department has issued a warning of the risks of doing business with 51 state-owned and seven privately held Iranian banks – in effect the whole of Iran’s banking sector. The list includes institutions specialising in export financing and foreign investment, as well as Iranian state-owned banks located as far away as Venezuela, Hong Kong and the UK.
Tehran is planning to list shares in a $90bn energy holding company on the Dubai International Financial Exchange (DIFX) in a bid to attract international investment to its struggling hydrocarbons sector.
It is also considering a European listing in Frankfurt and a listing in Singapore, Hong Kong or Shanghai, to gain exposure to Asian investors.
Sources in Iran tell MEED that discussions are in progress between the Iranian Privatisation Organisation (IPO) and DIFX about preparing the initial groundwork for the listing.
If successful, it will be one of the most significant stock market listings by any firm in the region and would also bring much-needed liquidity to the DIFX, which has struggled to attract listings and investor interest.
However, it is also likely to be met by trenchant opposition from Washington, which has been clamping down on trade links between Iran and the Gulf states.
The US Treasury department recently toured several key Gulf states, including the UAE, to persuade firms to cut financial dealings with Iran (see Agenda pages 22-23). It says any deal between Tehran and the UAE would be out of its jurisdiction, unless it involves a US firm.
"Our sanctions apply to American firms and American citizens, who are forbidden from engaging in business transactions," says a US Treasury spokesman. "If there is a foreign firm in another country, then needless to say we do not have jurisdiction over it."
However, DIFX is owned by Borse Dubai, which is in the middle of a wide-ranging deal with the US' Nasdaq. This will involve the US stock market operator taking a stake in the Dubai exchange to create Nasdaq DIFX.
MEED first revealed last month that Tehran was seeking to target foreign investment in its energy sector by creating an umbrella group of nearly 50 state-run firms and listing shares in the holding company on several international stock exchanges (MEED 8:2:08).