France to finance exports to Iran, aims to avoid U.S. sanctions
France will start offering euro-denominated credits to Iranian buyers of its goods later this year, a move to bolster trade while keeping it outside the reach of U.S. sanctions, the head of state-owned investment bank Bpifrance said.
France and other European countries have been looking to increase trade with Iran since Paris, Washington and other world powers agreed in 2015 to lift many economic sanctions in exchange for controls on Iran's nuclear program.
France's plan is to offer dedicated, euro-denominated export guarantees to Iranian buyers of French goods and services. The financing will be done through vehicles without any U.S. link, whether to the currency or otherwise aiming to avoid the reach of U.S. legislation.
U.S. President Donald Trump, who has threatened to pull out of the Iran nuclear agreement reached by his predecessor Barack Obama could be angered by this move. Washington has maintained some financial restrictions, leaving private banks - even those based outside the United States - wary of financing deals.
Bpifrance's chief executive Nicolas Dufourcq on Wednesday,was quoted saying, "We put a lot of preparation into this in 2017 and we keep on working, every single day, on the conditions of our entrance into Iran. This is a completely separate flow (of money)." He added, "There is no (U.S.) dollar in this scheme... no one holding a U.S. passport," referring to the new loans.
The chief executive also told lawmakers that there is a pipeline of about 1.5 billion euros in potential contracts from interested French exporters.
France, which has had close business ties with Iran since before the fall of the Shah in 1979 and still operates several large factories there and is not the only country in Europe seeking to deepen trade ties with Iran.
Italy, Germany, Austria and Belgium were also working on mechanisms that would shield their companies from the risk of U.S. sanctions according to a source in the French banking industry. It was not immediately clear how closely coordinated the efforts are. Italy and Iran, earlier in January, agreed a framework credit agreement to fund investments in Iran worth up to 5 billion euros. The accord was signed by Iran's government-owned Bank of Industry and Mine and Middle East Bank, and the investment arm of Italian state-owned holding Invitalia.
The Rome government chose Invitalia over state lender Cassa Depositi And Prestiti (CDP) because, unlike CDP, it has no exposure to U.S. investors and no U.S. footprint.
In October, Trump accused some signatories to the nuclear deal of profiteering from the accord. He later rowed back, saying he had told French President Emmanuel Macron and German Chancellor Angela Merkel they could "keep making money" in Iran.
France and other European countries have been looking to increase trade with Iran since Paris, Washington and other world powers agreed in 2015 to lift many economic sanctions in exchange for controls on Iran's nuclear program.
France's plan is to offer dedicated, euro-denominated export guarantees to Iranian buyers of French goods and services. The financing will be done through vehicles without any U.S. link, whether to the currency or otherwise aiming to avoid the reach of U.S. legislation.
U.S. President Donald Trump, who has threatened to pull out of the Iran nuclear agreement reached by his predecessor Barack Obama could be angered by this move. Washington has maintained some financial restrictions, leaving private banks - even those based outside the United States - wary of financing deals.
Bpifrance's chief executive Nicolas Dufourcq on Wednesday,was quoted saying, "We put a lot of preparation into this in 2017 and we keep on working, every single day, on the conditions of our entrance into Iran. This is a completely separate flow (of money)." He added, "There is no (U.S.) dollar in this scheme... no one holding a U.S. passport," referring to the new loans.
The chief executive also told lawmakers that there is a pipeline of about 1.5 billion euros in potential contracts from interested French exporters.
France, which has had close business ties with Iran since before the fall of the Shah in 1979 and still operates several large factories there and is not the only country in Europe seeking to deepen trade ties with Iran.
Italy, Germany, Austria and Belgium were also working on mechanisms that would shield their companies from the risk of U.S. sanctions according to a source in the French banking industry. It was not immediately clear how closely coordinated the efforts are. Italy and Iran, earlier in January, agreed a framework credit agreement to fund investments in Iran worth up to 5 billion euros. The accord was signed by Iran's government-owned Bank of Industry and Mine and Middle East Bank, and the investment arm of Italian state-owned holding Invitalia.
The Rome government chose Invitalia over state lender Cassa Depositi And Prestiti (CDP) because, unlike CDP, it has no exposure to U.S. investors and no U.S. footprint.
In October, Trump accused some signatories to the nuclear deal of profiteering from the accord. He later rowed back, saying he had told French President Emmanuel Macron and German Chancellor Angela Merkel they could "keep making money" in Iran.
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