Iran's international banking transactions have long been hampered by US sanctions, making it challenging for the country to engage in seamless financial transactions with the global community. This has had a profound impact on Iran's ability to access its own funds, which have been frozen in various international banks. The proposed financial institution could potentially help in bypassing these sanctions, allowing Iran greater access to foreign currency and enabling smoother trade operations.
In a significant development, Iran and the US reached an agreement in August 2023 that led to the exchange of five detained Americans in Tehran for five Iranians imprisoned in the US. A crucial part of this deal was the transfer of $6 billion in frozen Iranian assets from South Korean banks to Qatar, allowing Iran conditional access to the funds for the purchase of non-sanctioned goods. However, following a Hamas attack in October, the US and Qatar agreed to impose restrictions on Iran's access to these funds, halting the full disbursement but not completely freezing the assets.
The head of the Iran-Qatar Joint Chamber of Commerce, Mostafa Salehinejad, has expressed hope that the recent visit of the Iranian President to Qatar will result in the establishment of an exchange bureau, which would significantly streamline financial transactions between the two countries. This joint exchange house could potentially help in bypassing international sanctions, allowing Iran greater access to foreign currency and enabling smoother trade operations.
According to Salehinejad, Iranian traders currently have to transfer their foreign earnings to the UAE first and then to Iran, which reduces their profits by 20%. The establishment of a joint bank or exchange house could provide a solution to this problem, allowing for more efficient and cost-effective financial transactions.
While Qatar is committed to international laws that focus on sanctions against Iran, Salehinejad believes that the establishment of a currency exchange entity could be a significant achievement under the current circumstances. This plan was previously under study during the previous Iranian administration, and the current administration is optimistic about its implementation.
The proposed financial institution could potentially play a crucial role in unlocking Iran's financial potential, providing the country with greater access to its frozen assets and enabling smoother international transactions. As Iran continues to navigate the complex web of sanctions, the establishment of such a financial entity could be a game-changer, paving the way for increased economic cooperation and integration with the global financial system.