David Cameron has stepped in to directly challenge Barclays - and bring pressure on other banks - over its refusal to facilitate trade deals with companies in Iran despite the lifting of international sanctions.
One business near Cameron's own Oxfordshire constituency, lubricants firm Molyslip Atlantic, was unable to complete a £14,000 contract with an Iranian distributor after the bank refused to process the payment, reports The Times.
In response, the Prime Minister last week wrote to Barclays chief executive Jes Staley asking for a clarification on what appears to be a breach of United Nations and UK policy.
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Staley responded that as the US has retained its "primary sanctions" and the bank has operations there, it is "required to continue to restrict business activity with Iran". Most of the other large UK banks are thought likely to adopt a similar line.
Royal Bank of Scotland is particularly coming under pressure over its approach after Cameron's intervention, according to the newspaper. It would be embarrassing if the majority taxpayer-owned bank defied government wishes – but RBS is also sensitive to the US's position after a $100m (£69.7m) regulatory action over dealings in Iran, Cuba, Myanmar and Sudan in 2013.
The crippling regime of sanctions that had effectively barred Iran from international export and banking markets were lifted in January, after the country struck a contentious deal with the US to limit its nuclear ambitions.
The assumption was that while the agreement would be beneficial for Iran, especially as it could begin to monetise its massive oil reserves and repair its battered economy, it would also open up a huge new market and be a big boon for exporters around the world, including in the UK.
UK government ministers certainly take that view. In May, Business Secretary Sajid Javid will lead a British trade delegation to Tehran to promote the opportunity presented by the re-opening of a market of 80 million consumers.
The US has had primary sanctions in place since the Iranian revolution in 1979, which bar its companies and citizens from trading with the country. It imposed "secondary" sanctions affecting non-US citizens between 2009 and 2012 and it is these it has lifted – but the BBC reckons the result is a "grey area" for banks with a US presence.
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