EghtesadOnline: The past year has been especially difficult for Iranians working or studying in China due to financial issues, but new bank-related challenges seem to have arisen for Iranian citizens conducting business with the country’s biggest trader partner as a result of policies concerning the US.
Reportedly, Chinese banks are fully terminating their dollar-based credit cards and Iranian traders have been significantly impacted by this.
Pedram Soltani, the deputy head of Iran Chamber of Commerce, Industries, Mining and Trade—the main representative of the country’s private sector, announced the news on his Twitter page.
“Chinese banks are revoking their credit cards, including MasterCard and Visa cards, of their Iranian customers,” Financial Tribune quoted him as saying.
The official added that Chinese banks are very strict in adhering to standards and regulations devised by the Financial Action Task Force, the global Paris-based watchdog that works to combat money laundering and terrorism financing.
According to Soltani, Iranian customers are now only able to operate using the Chinese yuan.
The banking troubles of Iranians in China began over a year ago, challenging both students staying there and traders working with Chinese counterparts. Problems ranged from difficulty in conducting transactions and outright bank account closure.
They mostly pertained to three lenders, namely Agricultural Bank of China, Industrial and Commercial Bank of China and China Merchants Bank.
Later, reports emerged that bank accounts of some Iranian petrochemical companies in China are being blocked, prompting private sector frustration and government intervention to resolve the issues. The closures were attributed to new pressures from Washington and more stringent anti-money laundering measures adopted by Chinese lenders in line with the FATF requirements.
In late January, Hossein Yaqoubi, director of the Central Bank of Iran’s International Department, said the reopening of bank accounts for Iranian nationals has started and Chinese banks are unblocking these accounts upon confirming the identity of their Iranian customers.
But a new wave of challenges gripped Iranians in China after US President Donald Trump on May 8 unilaterally withdrew from the Joint Comprehensive Plan of Action, Iran’s nuclear deal with world powers and promised to reimpose sanctions. The first wave of sanctions was reinstated after a wind-down period ended on Aug. 6 and a second wave will arrive after Nov. 5.
On Aug. 20, South China Morning Post reported that banking difficulties for companies that do business with Iranians are likely to get even more complicated in the near future. It said many banks are once again closing bank accounts belonging to Iranians living in China and are closely inspecting and blocking transactions related in any way to Iran.