Australia Finds US Pressure on Iran Having an Impact
By Jonathan Winer
On November 20, Australia's Export Finance and Insurance Corporation (EFIC), found that "de facto sanctions" were having an impact on investment in Iran and Iranian financial access to international payments systems.
In its latest Market Watch newsletter, EFIC cited its chief economist, Roger Donnelly, as finding that banks and insurers involved in the trade and project finance markets have been taking steps to limit Iranian risk, despite the fact that Iran has been a "lucrative" market.
The newsletter (here) quoted Donnelly as stating that “Cover is still available, but banks and insurers are reportedly cutting their limits and raising prices energetically. This includes letter of credit (LC) confirmation . . political risk insurance and project finance.”
The Australian economist found that Iran's ability to obtain goods and services had likely not yet been hindered, as it could finance its needs through purchases made through cash generated by oil revenues. But the sanctions are creating what he termed "friction," to transactions involving Iran, and impair the ability of foreigners to do business with Iran.
From here, the question is whether the U.S. will secure agreement from other countries to initiate broader limitations on their financial institutions handling of Iranian related transactions, given its proliferation program and utter lack of any form of controls on its funds-at-origin.
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