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Three Iranian banks to open Munich branches

Three Iranian banks plan to open branches in Munich to allow financial transfers between German and Iranian businesses, the Münchner Merkur newspaper has reported. 06 Sep 2016

Bavarian economy minister Ilse Aigner has been in talks with Iran's central bank as well as the Middle East Bank, Parsian Bank and Sina Bank on the branches, the Merkur said (link in German).

Businesses face difficulty in transferring money between Germany and Iran because many western banks are still wary of breaking US sanction rules in Iran, Aigner said. The Iranian bank branches will open up the Iranian market, particularly to German SMEs who can see enormous export opportunities, she said.

The central bank has given the three banks permission to operate abroad, Aigner told the Merkur.

There are opportunities in markets including mechanical engineering, automotive, aerospace, environment and energy technology, and medical and pharmaceutical products, Aigner said, according to the Merkur.

International project expert George Booth, of Pinsent Masons, the law firm behind Out-Law.com said: "Banks in Germany but also in the UK and elsewhere in Europe are beginning to show a degree of willingness to support existing trusted customers in developing Iran-related business."

"A cautious iterative approach is being followed by governments in Europe and we are at a delicate stage. Credit must be given to governments in the political centres of Europe who are giving strong encouragement, particularly to those banks in which they have shareholdings, to step up to the plate. This includes export agencies of countries such as the UK, Germany, France and Italy offering products to cover some of the political and financial risk that commercial markets are not yet ready to assume," he said. 

"Regulatory agencies in all the main European financial centres remain in talks to enable Iran banks to restart banking operations, which adds to the current positive noises," Booth said.

It was announced last July that trade sanctions on Iran would be lifted in return for limits on Iran's nuclear programme.