Responsive ad

Iran n-deal will ease sanctions burden on banks

The Iran nuclear deal likely will ease pressure on banks to watch out for any potential violations of international sanctions linked to that country, UK law firm Zaiwalla said [19 August 2015].

The plethora of sanctioned entities that banks have to avoid in order not to get punished by regulators has grown over the years. In the year to July 2015 alone, the number of sanctions imposed by the UK rose by 3% from 2,401 to 2,477. Similar situations are reported in other European institutions, as well as those outside Europe.

Sarosh Zaiwalla, senior partner of  Zaiwalla & Co (pictured), a London law firm specialising in firms affected by international sanctions, said he believes that sanctions compliance for UK banks is set to ease considerably, as the lifting of sanctions on Iranian enterprises commences later in 2015.

Zaiwalla, who represents several sanctions-hit entities including two Iranian banks, said, “The lifting of sanctions on Iran, which account for almost a quarter of the UK’s sanctions list, will be greatly welcomed by the British banking sector.

“With the number of sanctions imposed by the UK increasing year-on-year, sanctions compliance has been an increasing burden for British banks, especially for smaller banks, which have not had the adequate resources following the banking crisis to adapt to tougher, bureaucratic regulations.

“By their very nature, the true reach and damage of economic sanctions is often unknown, which is why compliance by international banks is worrying. Whilst sanctions can be useful to signal disapproval of a country’s actions, we need to be fully aware that they are not cost-free for the sanctioning countries and, in fact, have harmful implications for their financial sectors.”

Zaiwalla successfully represented Iran’s Bank Mellat in a disputed sanctions regime implemented in Europe during the recently ended spat between Iran and the West over Iran’s nuclear programme. Bank Mellat, Iran’s largest private bank, was sanctioned in 2009 for alleged links to Iran’s nuclear programme. As a result of its listing, the bank claims, it suffered substantial losses in revenue and its reputation was significantly damaged. In 2013, Zaiwalla successfully had the sanctions on the bank lifted, as the UK Supreme Court ruled the UK Government’s listing of the bank to be “irrational” and “arbitrary.” Zaiwalla & Co., on behalf of the bank, is claiming GBP 2.3billion ($4billion) damages against the British Treasury department.


UK Supreme Court | Bank Mellat judgment summary


Author: Editor

Share This Post On
Share This

Share This

Share this post with your friends!

Share This

Share this post with your friends!