Ahead of a meeting with European bankers to discuss Iran, Secretary of State John Kerry told reporters in London Tuesday that European banks should not hold back from doing business with Iran because of concerns about potential U.S. retaliation.
"We sometimes get used as an excuse in this process," Kerry said. "If they don't want to do business or they don't see a good business deal, they shouldn't say, 'Oh, we can't do it because of the United States.'" (See also: 3 Possibilities If Sanctions Against Iran Lift.)
Banking has acted as a bottleneck in the reintegration of Iran into the economic system following the lifting of some sanctions in July, 2015. The country had been subject to a number of U.S., EU and UN sanctions stemming from its nuclear program, human rights abuses, and the 1979 Revolution.
There remain a number of "designated entities," such as those associated with the Revolutionary Guard, which the U.S. still considers off-limits. European banks have been subject to stiff fines for violating American sanctions in the past, such as when BNP Paribas was fined around $9 billion in 2014 for processing transactions in sanctioned countries.
"It's just not as complicated as some people think," Kerry said. "That's absolutely open for business as long as it's not a designated entity, period. Very simple."
According to earlier reports, bankers beg to differ. An unnamed source, described as a senior European banker, told the Guardian in January, "it’s very difficult to operate in Iran without hitting the Revolutionary Guards or somebody else who is sanctioned by the Americans."
Despite reluctance on the part of the continent's banks to get involved in Iran, a few European companies are returning to the country. The EU imposed sanctions on Iran – particularly its energy and financial sectors – in 2010 and 2012, which supplemented earlier UN and U.S. measures.
Peugeot S.A., a French car-maker that was pushed out of the country in 2012 by its part-owner General Motors Co. (GM), plans to sell 400,000 cars in the country by 2025 at the latest. European oil majors such as Total S.A. (TOT), Eni SpA (E), StatOil AS A (STO), Royal Dutch Shell PLC (RDS-A, RDS-B) and BP PLC (BP) were already meeting with Iranian officials in May and June, ahead of sanctions removal. (See also: Unsanctioned Iran Means More Oil on the Market.)
Even a few American companies are venturing back into the country, including Boeing Co. (BA), which met with Iranian officials in April – although they had already stuck a deal with Boeing's Netherlands-based rival Airbus Group SE – and General Electric Co. (GE), which sold medical equipment during the sanctions era under a humanitarian exemption.
Kerry's attempts at clarifying the U.S.'s position towards business in Iran may help smooth the path for European banks and the firms that depend on them, but not everyone will be easily convinced. Iran remains on the U.S.'s state sponsors of terrorism list, and many Republicans are determined to tear up last year's nuclear deal at the first opportunity.