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Chinese banks cut business with Iranian banks: report

The United States, which is spearheading efforts to isolate the Islamic Republic over activities which Washington fears are ultimately aimed at making bombs, has urged international banks and companies to stop doing business with Teheran.

China has growing commercial ties with oil-rich Iran and has been reluctant to impose tough economic sanctions on the country. Teheran says its nuclear programme is a peaceful drive to produce energy.

“Because of America’s pressure, China’s banking system has cut its cooperation with Iranian banks for four months now,” the Etemad daily quoted Deputy Foreign Minister Mahdi Miraboutalebi as saying, without giving details.

It was not clear whether all or just certain transactions had been halted and Iranian officials were not immediately available for comment.

Asadollah Asgaroladi, the head of the Iran-China chamber of commerce, said in December that Iranian traders had faced difficulties in opening letters of credit with Chinese banks, restricting a key instrument in trade.

Saturday’s Etemad report said Asgaroladi called China’s banking action unacceptable and that an Iranian delegation would visit China in order to remove such obstacles to business ties.

China has become an increasingly important trading partner with Iran as expanding U.N. and US sanctions over Iran’s nuclear activities have encouraged Western firms and banks particularly to scale back dealings with the Islamic Republic.

During a visit to Teheran late last year, Chinese Foreign Minister Yang Jiechi was quoted as saying Beijing wanted to expand ties with Teheran.

China and the four other permanent members of the U.N. Security Council as well as Germany last month agreed on a draft new sanctions resolution against Iran over its refusal to halt sensitive atomic work.

The draft, a watered down version of what Washington wanted because of resistance by Beijing and Moscow, calls for extended freezing of assets and travel bans on specific Iranian officials. But it falls far short of the kind of tough measures the United States wanted imposed on Iranian banks.