Mumbai: Indian banks have started declining exporters’ requests to process transactions requiring Iranian port services, fearing action from the Office of Foreign Assets Control (OFAC) of the US Treasury Department.
As the US-led international sanctions on Iran are yet to be removed, Indian banks fear that facilitating trade which directly or indirectly helps Iran could bring them under the OFAC scanner.
The banks’ stance could jeopardise exports to the Central Asian and Confederation of Independent States (CIS) countries, and even to Afghanistan, according to industry sources.
“OFAC penalties and settlements are very huge and the US comes down heavily on any company or organisation violating their norms,” said Ajay Sahai, director general and ceo of Federation of Indian Export Organisations, the apex body of Indian exporters. “Therefore, Indian banks are getting very careful so that they are not on the wrong side of the law.
“However, I don’t think OFAC imposes penalties on cases where exports pass through Iranian ports to a third country on which there are no sanctions.”
Exports to the Central Asian and CIS region account for over $3bn annually. The annual trade figure, including imports, stands at $8bn. Shipment through strategically located Iranian ports to nearby countries are expected see exponential growth in the coming years.