4 Chinese banks refuse to issue LC for Iran
4 Chinese banks refuse to issue LC for Iran

خانه 4 Chinese banks refuse to issue LC for Iran

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4 Chinese banks refuse to issue LC for Iran

4 Chinese banks refuse to issue LC for Iran

Following the implementation of new laws in China and the requirement of banks to obtain clearance documents from importers, since the beginning of this year, payment of Chinese imports from Iran has become difficult due to the imposition of some sanctions and Iran’s petrochemical exports to China are expected to decline.

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Industrial sources say that as foreign traders in China will be more closely targeted as part of an anti-money laundering program, delays in payment are expected, according to a report by ICIS, the largest petrochemical market information provider. Petrochemical products imported from Iran will deteriorate, it is expected that the export of Iranian petrochemicals to China will decrease further.

Transactions with Iran, which exports about half of its annual petrochemical production to China, are at risk of such scrutiny because the country is still under sanctions, the sources added.

According to this database, methanol and polyolefins are at the top of Iran’s list of exports to China. According to Chinese customs statistics, between January and May 2017, imports of polyethylene from Iran decreased by 15% compared to the same period last year, while monthly imports of methanol in March and April reached less than 200,000 tons.

Iran’s statistics show that exports of non-oil goods to China in the first four months of 2017 increased by a total of 66 percent to 11.6 million tons. But since the beginning of this year, the process of paying for Chinese imports from Iran has become increasingly difficult.

China’s foreign exchange bureau has been asking Chinese companies to provide clearance information to banks as they pay for foreign shipments since May. China’s central bank will mandate any financial institution in the country in late December 2016. To establish their transaction monitoring rules for implementation in July.

A Chinese banking source said transactions with Iran were particularly vulnerable to scrutiny as Chinese banks saw them as risky transactions and forced Chinese importers to find alternative means of paying for their purchases.

The source added that importers made their payments through foreign offices or through the bank accounts of Iranian sellers in other countries. Shipments originating in Iran will be withheld, and smaller banks will not be held accountable for reporting Iranian-related transactions to authorities.

According to industry sources, in the past, importers of such Iranian shipments were registered in the import documents of “foreign shipments” and the banks did not receive further details about the origin of these products. According to these sources, since May, 4 large banks China, Bank of China, China Construction Bank, Agricultural Bank of China and Industrial and Commercial Bank of China are refusing to release LC for transactions originating in Iran. Industrial resources So far, the impact of these measures on petrochemical trade with Iran has been minimal.

One such producer said payments for Iranian petrochemical products were still being made because Iran is a reputable customer in a large bank (China), but acknowledged that any payment required customs clearance documents.

“We always follow foreign trade processes and issue customs declarations when needed,” said one trader. “We are credible customers and we have a large volume of financial transactions with banks,” said one trader. “Trade payments of Iranian origin through Chinese banks have not been affected.” According to traders, some importers may still have difficulty paying in small volumes.

According to an industrial source, the non-issuance of LCs by banks has greatly affected Chinese second-tier traders, and among high-level traders who buy directly from Iran and withdraw money from shipments. Pay by telegraph (TT) is not much.

Some sources said a closer look at Iran’s transactions in China would likely prompt some market players to announce the origin of their shipments elsewhere. “Work is being done and it is not limited to now.” It cannot replace Chinese demand. Despite the quiet market after the Eid al-Fitr holiday, which marks the end of Ramadan and Muslim fasting, Iranian sales are currently boosting in Turkey, Iraq and the Commonwealth of Independent States.

Author: persian / Date: 2017-10-26
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