International banks are steering clear of writing letter of credit (L/C) business with Iran for fear of being fined, according to an Iranian banker.

"Going through a very simple process of opening L/Cs for the importation of goods, even humanitarian goods, has become much more difficult and a hassle," chief executive of Middle East Bank, Parviz Aghili, told the Reuters news agency. "The banks just do not want to take the risk," he added.

Fear of fines

Sanctions imposed by the US and Europe are not intended to apply to goods for humanitarian purposes such as food and medicine.

But according to Aghili, processing even these deals is difficult. He says that while bankers in international banks understand that humanitarian trades are not proscribed by sanctions, they nevertheless tell him that the risk of being fined for sanctions violations outweighs potential rewards writing L/C business with Iran.

Lobbying efforts

Tehran-headquartered Middle East Bank is privately owned and started operations in November 2012.

Iran has been lobbying hard to re-establish normal links with international banks since western leaders loosened sanctions on the Islamic Republic as it moved to temper its nuclear ambitions.

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