Abu Dhabi, UAEWednesday 23 October 2019

Iran's shrinking commercial empire in London

Tehran occupies just a few prime spots as isolation takes its toll

Iran's Bank Melli has a branch in the former Old Vestry Hall in Kensington High Street. Alamy
Iran's Bank Melli has a branch in the former Old Vestry Hall in Kensington High Street. Alamy

Overlooking parliament square with a clear view of Big Ben, NIOC House on Victoria Street is advertised as one of the best-located office blocks in central London.

It would take a close observer to figure out that the building belongs to the National Iranian Oil Company and is part of a now depleted worldwide portfolio that the Islamic Republic has owned through decades of isolation and international sanctions.

The building is rented to commercial tenants as well as providing top floor offices for the state-run company. It has also provided a venue for the British-Iranian Chamber of Commerce (BICC), a body chaired by Norman Lamont, the former Conservative chancellor of the exchequer.

The BICC maintains an active website, where Lord Lamont last posted early this month about the implications of the European launch of the Instrument for Supporting Trade Exchanges (Instex) designed to support trade with Iran in the face of US sanctions imposed after withdrawing from the 2015 nuclear deal.

"Although a number of operational details need to be addressed, the launch of Instex is significant and encouraging to those of us who believe that the UK must honour its commitments under [nuclear deal] and that the overwhelmingly pressing sectors to address must be those of a humanitarian nature," he wrote in a cautious welcome. "In time, it may be available for trade in other unsanctioned items."

Conservative politician Norman Lamont, centre, chairs the British-Iranian Chamber of Commerce in London. Getty Images
Conservative politician Norman Lamont, centre, chairs the British-Iranian Chamber of Commerce in London. Getty Images

The BICC's Twitter feed and calendar of events however appears to have ground to halt shortly after President Donald Trump pulled Washington out of the nuclear deal last May.

Other relics of the Iranian presence in London are dotted around the capital.

Retired employees of the Melli Bank Plc told The National of the strange experience of working in sanctioned institution, prior to the UN sanctions being removed when the 2015 deal on Iran's nuclear programme was signed. There are thought to be more than 40 bank staff still employed in the city.

One of the branches overlooks the Bank of England on Moorgate in the City while another operates on Kensington High Street, one of the prime shopping districts in London.

The trophy premises form something of a gilded cage for the staff and a gallows humour is prevalent in their ranks.

“Iranian banks are all facing problems and uncertainties," said one clerk who quit in 2009. "Anyone who is close to the top management keeps their jobs and the rest have to be sacked due to their downsizing as a result of the sanctions.

"Those who remain have nothing much to do. They just turn up and sit behind their desk and crack jokes. Any banking activity that might take place would be to help long-term customers or provide special services. Sometimes this includes requests to purchase goods ordered from the Iranian government."

Another former banker, who also wished to remain anonymous, said he could see little hope of a revival now that President Trump was intensifying pressure on Iran though the re-imposition of US financial and other sanctions.

“The new EU financial channel [Instex] is just another ploy to extract more money from Iran. It is a misuse of the banking system," he said. "Iran’s economy is desperate and the regime has succumbed to the pressure.

"President [Hassan] Rouhani is aware of the seriousness of the economic situation and yesterday showed the regime’s willingness to talk to the US by deceitfully saying that if America repents Iran will be happy to enter negotiations with it," he added. "The Iranian government says it has removed the US dollar in its foreign trade but at the end of the day the country’s economic system is run on the US dollar. Trump is a dealer and might be encouraged to go soft on the regime, which is doing its best to stay in power in face of numerous challenges."

A British court heard last year that the Victoria Street building and the funds held by Bank Melli and Bank Sepah, which also has a branch in the city of London, were the main Iranian state-owned assets in the UK.

The court was petitioned by relatives of the victims of the September 2001 attacks by Al Qaeda on New York and Washington.

The relatives want the English High Court to enforce a 2012 decision, which found there was evidence to show that Iran provided “material support and resources to Al Qaeda for acts of terrorism”.

The plaintiffs began trying to enforce the New York judgment in England in 2015. They have already got court support in Luxembourg where $1.6 billion (Dh5.9bn) of Iranian assets are frozen. Iran has also contested those claims.

Lee Wolosky, a partner with law firm Boies Schiller Flexner, said that the plaintiffs intend to pursue Iranian assets “wherever in the world they may be found in order to enforce these judgments”.

“And we expect foreign courts to permit enforcement of valid, final US judgments if they wish reciprocal treatment in US courts,” he told Reuters.

Updated: February 10, 2019 04:31 PM