An Iranian industry leader says business is booming and there are no problems opening foreign exchange letters of credit (L/Cs) despite sanctions imposed by Washington on dealings with Iranian banks.

This view contrasts with reports from the US over recent months that say international L/C business has been adversely impacted by Washington's ban on US banks dealing directly or indirectly with Iranian financial institutions.

No L/C problems

Managing-Director of Iran's Petrochemical Commercial Company (PCC), Mohammad-Ebrahim Mohammadi, has told Iran's official IRNA news agency that all Iran's petrochemical output up until 2009 has been sold in advance in the international market.

"Iran's petrochemical outputs have been sold through pre-export and pre-financing. Therefore, the issue of imposition of sanctions will have no adverse effect on the sale of such products," he said.

PCC has no problem opening foreign exchange L/Cs according to Mohammadi. "Purchasers should open forex credit for products they intend to buy," he said.

Sanctions

The US has barred Iranian banks from dealing with the US financial system and increasingly pressured European and international banks to reduce their business links with Iran.

Banks such as Swiss banks UBS and Credit Suisse as well as global giant HSBC also say they have reduced their L/C and other business with Iran. (DC World News, 14 June 2006).

International impacts

Reports earlier this year suggested Washington's sanctions had impacted particularly on import L/Cs opened by Iranian importers.

A US media report recently quoted a Tehran based business consultant saying that exporters to Iran now require buyers to deposit the full amount of a transaction to obtain L/Cs. (DC World News, 7 February 2007).

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