x Abu Dhabi, UAEMonday 24 July 2017

Britain to sever financial ties with Iranian banks

The ban, caused over fears about Iran's nuclear programme, extends to all branches and subsidiaries of Iranian banks.

LONDON // The UK will cut financial ties with Iranian banks over fears about its nuclear programme, Britain's chancellor of the exchequer, George Osborne, said yesterday.

Mr Osborne said all UK financial institutions will cease business relationships and transactions with all Iranian banks.

The ban extends to all branches and subsidiaries of Iranian banks.

Meanwhile, a US official said the Obama administration will hit the Iranian economy with new sanctions too, teaming up with Britain and Canada to put pressure on Tehran.

The official said the financial and energy sanctions will target Iranian companies, the Revolutionary Guard and Iran's petrochemicals sector.

Mr Osborne said this is the first time the British government has cut an entire country's banking sector off from the UK's financial institutions. The British government acted after the International Atomic Energy Agency highlighted fresh concerns about the possible military dimensions of Iran's nuclear programme.

Mr Osborne said in a statement that Iran's nuclear activities "pose a significant risk to the national interests of the UK and countries across the region".

London is a major financial centre and Mr Osborne said the British government's decision to sever linkages with the Iranian banks will make it much harder for them to use the international financial system to support Iran's nuclear and ballistic missile programme.

He added: "This measure will protect the UK financial sector from being unknowingly used by Iranian banks for proliferation related transactions."