Swiss humanitarian payment channel with Iran ‘ready’, awaits capital

Switzerland, 60% of whose exports to Iran are medicine, has been hard at work to allow the creation of a humanitarian payment mechanism that helps the uninterrupted flow of humanitarin goods to Iran in the face of renewed US sanctions.

President of Iran-Switzerland Joint Chamber of Commerce says a Swiss payment channel to help export of humanitarian goods to Iran is ready but is waiting the Iranian money to become operational. 

“The channel is ready, its characteristics have been announced, but it’s waiting for the deposit of necessary funds from Iran,” Sharif Nezam-Mafi, president of Iran-Switzerland Joint Chamber of Commerce, told Iran Chamber Newsroom. There is no Iranian money in the channel yet, he said.

“There is no money from Iran in Europe, much of the Iranian funds are still in India, Iraq, China and South Korea,” added Nezam-Mafi, referring to the buyers of Iranian crude who have been granted waivers from renewed US sanctions. They haven't been able to send back the export money to Tehran due to heavy restrictions on any financial transaction with Iran in the world

President of Iran-Switzerland Joint Chamber of Commerce mentioned that Europe needs to allow the transfer of Iranian money from Asia so the channel can start work. He said that last time when Switzerland wanted to create a similar channel, permitted banks were given 24 hours to transfer the Iranian money from Japan to Switzerland.

That time it was allowed by the US Treasury under the previous round of sanctions, he added, reminding that “same thing should be done this time as well.”

“It’s not yet known when the channel will become operational because there is no Iranian money inside the new mechanism,” Nezam-Mafi said when asked about a specific date of the system’s start.

President of Iran-Switzerland Joint Chamber of Commerce said the Swiss officials have already designated a bank to host the humanitarian payment channel. “It could either be the Heritage Bank or Banque de Commerce et de Placements (BCP) that were handling the Iranian money before the sanctions,” Nezam-Mafi predicted. “But my guess is that it will be the BCP as it is linked with Turkey and could possibly bring in the money Iran owes from Turkey for its gas sales to Ankara,” he said.

The Swiss lender, 30% of whose shares belong to the Turkish bank Yepi ve Kredi Bankasi A.S., announced in last May it had suspended new transactions with Iran following the US withdrawal from the 2015 international treaty on Iran nuclear deal, according to a Reuters report.   

The channel is solely designed for humanitarian issues, and at this stage it will be limited to medicine and only from Swiss companies, according to Nezam Mafi, who expressed hope the channel will also be used for the sale of grains later.

He told the Iran Chamber Newsroom in December that the payment system would be in place by mid-January.

60% of Swiss exports to Iran are comprised of medicine and medical equipment, that’s why the channel is very important for Iran to allow the uninterrupted flow of necessary drugs to the country.

Early this year, head of Epilepsy patients Association in Iran said the renewed unilateral US sanctions have caused shortage of some medicine. “Some of the patients suffer from epilepsy that is resistant to treatment and must consume new foreign medicine but unfortunately the sanctions have caused shortage in such drugs,” regretted Darius Nasabi Tehrani, Iranian Epilepsy Association Chief Executive.

The Swiss payment channel will be a separate financial transaction system with Iran that will run in parallel with Europe’s so-called Special Purpose Vehicle (SPV), that’s not been put in place so far. 

Sources: Iran Chamber of Commerce

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