A former top Treasury Department official told THE WEEKLY STANDARD Thursday that major international firms still do not want to do business with Iran, despite efforts by the Obama administration to persuade foreign banks and businesses to reengage there.
Stuart Levey, the Treasury Department undersecretary for terrorism and financial intelligence under the Bush and Obama administrations, said that though some sanctions on Iran were lifted after last summer’s nuclear deal, firms remain wary of doing business with the Islamic Republic due to the country’s support for terrorism and other illicit activities.
“What you’ve seen more broadly … is the sanctions get lifted, [but] the major international financial institutions will still resist doing business until the underlying facts change,” Levey, now the chief legal officer for London-based HSBC Holdings, said during an event at the Foundation for Defense of Democracies.
The Obama administration initiated a global tour to encourage foreign firms to reengage with Iran around May, after the Iranians complained about not seeing the economic benefits from the nuclear deal.
Secretary of State John Kerry has led the charge, saying that he wanted to “make it clear that legitimate business … is available to banks,” despite remaining U.S. sanctions, “as long as they do their normal due diligence.” The secretary later said his efforts to “personally engage with banks and businesses” went “beyond” the terms of the nuclear deal.
After Kerry met with major European banks in London in May, Levey said HSBC perceived the administration’s encouragement to “do business with a state sponsor of terror” as “odd” and “a very difficult ask.”
Levey added that foreign banks are acutely aware that American institutions are banned from working with Iran, which dampens Kerry’s campaign to promote international reengagement there.
“You’re trying to persuade foreign financial institutions to do business … under a background where American financial institutions are still forbidden, it’s against the law” Levey told TWS. “That’s something which every European bank and Asian bank is very well aware of.”
Levey has previously criticized the administration for their push to drum up business with Iran. In a May op-ed, he suggested that Kerry was encouraging financial institutions to pursue financial crime risks by engaging with the country.
“No one has claimed that Iran has ceased to engage in much of the same conduct for which it was sanctioned, including actively supporting terrorism and building and testing ballistic missiles. But now Washington is pushing non-U.S. banks to do what it is still illegal for American banks to do,” he wrote. “This is a very odd position for the U.S. government to be taking.”
