Pressure from Washington on banks to think twice about writing letter of credit (L/C) business with Iran is working, according to a report in the globally read Time magazine.

There appears to be little evidence, however, to suggest that the pressure - exerted as part of the international campaign to curb Iran's nuclear ambitions - is having any substantial impact on banks across Iran's major trading partners.

European pressure

Last month DC World News reported that four of Europe's biggest banks, under pressure from US officials, had already started to curb their trade finance activities with Iran.

Financial institutions are apparently doing so before the UN Security Council decides on a resolution to impose economic sanctions that could disrupt trade with Iran and associated L/C processing and payments.

Limited slowdown

European diplomats now say that the L/Cs that facilitate Iran's foreign trade are already drying up, according to the report in Time magazine.

Sources canvassed by DC World however, say that pressure from Washington to restrict L/C business with Iran is so far mainly effective on US and European banks. It would take a boycott by banks used by Iran's major trading partners to make a heavy impact on Iranian trade finance volumes they say.

Trading partners

Japan is Iran's major customer and the largest buyer of Iranian oil. It has made unusually strong diplomatic moves to persuade Iran to limit its nuclear ambitions.

China, South Africa, South Korea, Taiwan, Turkey, the United Arab Emirates, South Korea and Russia are also major non-European trading partners of Iran. Italy, Netherlands, Germany and France are major European trading partners with Iran.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.