An increasing number of fintech companies are applying for US banking licences, potentially turning former partners into competitors
 
Will the banks be able to keep up in this rapidly changing landscape? The exploding popularity of fintech applications continues to transform the finance industry, a sector of the economy previously dominated by traditional-minded institutions. One notable development in the increasingly widespread use of fintech apps is the merging of banking and fintech that we are beginning to see. Fintech companies are rushing to apply for banking licences, and quite a few have already been approved. The first to lead this trend was fintech giant Square, which was able to obtain approval to create an industrial bank from the Federal Deposit Insurance Corporation (FDIC).

Since then, other fintech companies such as Varo Money, LendingClub, SoFi, Figure and Oportun either have been approved to create their own banks or have applications pending. These developments are important because it will create competition for existing banks and also affect the partnerships between the two entities in the future.

Certainly it is alarming for banks to realise that their current partner may soon become a competitor, armed with the benefit of a deep understanding of their operations borne from their work together. However, this change in status will also subjugate fintech companies with an increased amount of regulation and oversight. As fintech continues to create easy, convenient, quick and low-cost methods of serving the financial needs of individuals as businesses, banks must move to develop their own mobile banking technology to stay competitive.

 

Changing fintech landscape
In a select few US states, industrial banking charters are offered to companies who want to offer banking services and loans to small businesses without the burden of oversight by the Federal Reserve. Industrial banking charters are controversial, with many raising issues with a licence that allows non-financial companies to offer banking services. Because of this, an industrial banking charter has not been approved in 10 years – at least not until Square had theirs approved in March of 2020.

Certainly, this is an interesting development for the financial services sector. It could be a very positive change for small businesses, who may find that they have more options in terms of obtaining loans.

    Servicing the small business market brings ample opportunities for fintech, as this historically has been ignored by traditional financial institutions

Square’s focus has always been on helping small businesses, which has never been more important, since the coronavirus pandemic has hurt profits for so many of them. In fact, one other interesting trend that has been seen among fintechs in the midst of the pandemic is the opportunity presented to them to serve small businesses under the Paycheck Protection Programme (PPP).

Fears that fintech will completely supplant the existing financial services sectors have been reignited. The birth of fintech originally scared banks for this same reason, and most of the traditional financial institutions reacted by agreeing to partnerships with fintech companies in the hope of riding their wave of success. The ability of fintech companies to offer new solutions, face challenges and adapt to a rapidly changing tech landscape has forced banks to reform their technology and adapt to better suit customers’ needs.

In fact, servicing the small business market brings ample opportunities for fintech, as this historically has been ignored by traditional financial institutions. This is a problem, with only 27.5 percent of small businesses, on average, being approved for business loans by banks. The pandemic has devastated small businesses, yet all signs point to the beginning of a recovery for the economy as a whole. It could be the perfect time for fintech applications to start offering banking services to help revive small businesses around the world.

 

Bypassing barriers
However, the process of applying for a banking charter can be lengthy. For example, it took Varo Money three years to be approved for theirs. Some fintech companies have found clever ways to bypass this governmental barrier, however, by acquiring digital banks in their portfolio. LendingClub was able to acquire Radius Bank in February, which may have saved them the steep fees involved in a banking charter application.

Both Radius Bank, LendingClub and Varo Money have focused more on individual consumers rather than small businesses, although this could change. The democratisation of stock reading, cryptocurrency investing and online banking has broadened access to financial services typically reserved for the middle or upper classes.

The financial services market has become so rife for innovation, and so potentially lucrative, that many industries are trying to get a piece of the pie. There has been a new term coined for technology companies who have recently begun offering financial services: techfin. However, traditional financial services point out that without the necessary knowledge, the ease with which everyday people can invest money via fintech apps can become dangerous. With fintech apps moving into the banking sector as well, there is a concern that these companies will encourage their users to invest their money rather than keep them in savings accounts.

 

Banking with fintech apps
So, what is behind this trend of fintech companies moving to get involved in the banking sector, rather than sticking with their partnerships with well-established financial institutions? By expanding their services to include those most commonly found in the banking sector, fintech apps can expand their clientele and gain access to a larger market. The profit is undoubtedly larger, as fintech companies can then cut out the middleman and deal directly with their customers, building relationships in the process.

 

Will we see more fintechs in banking?
There is a lot for fintechs to gain by applying for a banking charter. However, as we mentioned previously, the application process can be lengthy and expensive. There are also a lot of government regulations and obstacles that need to be overcome before an application is approved. Robinhood learned this lesson when they pulled their national banking charter application.

Previously, there was discussion from the Office of the Comptroller of Currency (OCC) of a special banking charter for fintech companies that would fast track the application. However, this was shut down in October 2019 after a New York federal judge ruled that the OCC, the regulator issuing the charters, did not have the authority to create this special type of charter. However, it is a significant development to have seen three fintech companies get approved with their banking charters (Square, Grasshopper and LendingClub). There have only been nine banking charters granted nationwide since 2008, and none at all in the past 10 years.

 

The benefits of a banking charter
It’s a fact that the traditional financing institutions have underserved small businesses, especially minority-owned small businesses. It’s also true that many of these same small businesses were hit hard by the pandemic and forced to close their doors because of lack of funding.

There is a huge need for financial services for small and mid-sized businesses as well as individuals who are just getting their financial lives started. There are undoubtedly hurdles to obtaining a national banking charter, but the rewards are astronomical. Fintech businesses with banking charters can work with Automated Clearing House (ACH), a standard payment rail. They can operate in any state in the US without having to deal with different state laws and jurisdictions and offer their customers FDIC insurance.

Fintech companies may be shaking up the financial sector, but that might be a good thing. Despite negative PR about the risks involved with new fintech investing apps and the value of cryptocurrency, clearly these companies are leaning towards accepting more federal regulations in return for access to broader market segments. The approval of so many fintech applications for national banking charters will serve to further legitimise many of these new fintech apps, and possibly become stiff competition for their former banking partners in the process.

 Regarding their present potentials, Iran and Turkey can enhance the volume of their bilateral trade up to $100 billion per annum, Mahmoud Va’ezi, the Iranian minister of communications and information technology said in Tehran on Saturday.

“Both sides are resolved to reach a 30-billion-dollar trade volume in the near future, the goal which has been set by the two countries’ presidents in their recent meeting,” Va’ezi said in a meeting with Erdal Bahcivan, the chairman of Istanbul Chamber of Industry, IRNA reported.

During the meeting, Va’ezi highlighted the measures taken by Iranian and Turkish banks on the ways to ease transactions and lamented that “Turkish banks are under the influence of westerners but we hope that they will take an independent attitude.”

The Turkish official, for his part, emphasized on the key role that the private sector plays in hitting the determined trade volume and noted that the Turkish administration is in charge of removing banking barriers and lowering customs tariffs to set a proper environment for expansion of common trade ties.

Elsewhere in his remarks, he addressed the issue of improving joint telecommunication relations and asked for establishment of a Turkish information technology park in Iran.

On April 16, Turkish Prime Minister Ahmet Davutoglu in a meeting with the Iranian President Hassan Rouhani in Tehran, underlined his country’s decisiveness in expanding vigorous relations in various economic fields, specifically in banking, and noted that some measures have been done on the way to reinforce cooperation between the two sides’ stock exchange markets.

The Turkish prime minister also underscored the vitality of converting the current preferential trade agreement (PTA) between the two countries into free trade agreement (FTA) in future.

Earlier in the same month, Vaezi visited Davutoglu in Iran-Turkey Joint Economic Committee, where expressed Iran’s readiness to develop ties with Turkey in banking and tourism sectors.

Davutoglu, for his part, said that his country is keen to invest in Iran’s different sectors, including tourism, emphasizing that the administrations of both countries should direct their private sectors toward the realization of shared economic aims.

 

Based on report ,Iran’s non-oil foreign trade in the first two months of the current Iranian calendar year of 1395 (March 20- May 20, 2016) reached $12.4 billion according to the latest report of Iran Customs Administration.

According to the International statisticts indicated that Imports, including field corn, soybean, rice, and some specific auto parts stood at $5.49 billion, down 13.54 percent compared with last year’s similar period. Imported goods mainly originated from China, the United Arab emirates (UAE), Russia, South Korea, Turkey, Germany, and India.

Exports, which chiefly comprised gas condensate, petroleum gases and liquefied hydrocarbon gases, liquefied propane, and bitumen, reached $6.85 billion, indicating a 14.68 percent drop compared with the corresponding period of last year. China, Iraq, the UAE, South Korea, and India were the main export destinations.

According to Iran’s Customs Administration, in the past Iranian calendar year, which ended on March 19, 2016, the value of the country’s non-oil trade reached over $83 billion.

In the past year, the Tasnim news agency reported, Iran exported $42.415 billion worth of goods while its imports reached $41.499 billion, showing a 16.11 percent decrease in the value of exports and a 22.53 percent decline in the value of imports when compared to its previous year.

 Iranian Minister of Industry briefed MPs on the actual outcomes of the visits of 791 officials together with 2045 private companies to Iran following the implementation of the JCPOA.

In an open session of the Parliament on Tuesday, Mohammad Reza Nematzadeh, Minister of Industry, Mine and Trade, presented the MPs with a report on the current status of industries, challenges and strategies in line with the implementation of Resistance Economy policies.

He maintained that following the implementation of Iran nuclear deal, six presidents and 791 officials accompanied by 2045 private companies from 32 countries across the world visited Iran, and 68 governmental MoUs and 119 foreign contracts have been signed since then.

12 industrial projects with foreign investment worth $501 million were approved by the country’s Foreign Investment Board. He went on to add that SWIFT is currently running and the number of participants from foreign companies in Tehran’s international exhibitions has had an increase of about 30 per cent.

The minister further noted the launch of negotiations over the joining of Iran to the World Trade Organization (WTO), saying 60 countries have backed Iran’s membership.

According to Nematzadeh, Iran ranks 74 among 144 countries in global competitiveness, while it holds the 67th place among 142 countries in industry.

He described Iran’s ranking in human development – 69 among 188 countries – as acceptable, saying the ranking indicates high education, work experience and talents among Iranians.

In business, Iran ranks 117 among 189 countries, which shows relative improvements compared to the 152nd ranking three years ago, he added.

Nematzadeh further noted that Iran has the worst ranking and index of Economic Freedom – 171 among 186 countries – which speaks of too many restrictive regulations in the country. He called on the new Parliament to make necessary improvements in this regard.

Sue Millar of Stephenson Harwood Law firm says British banks are generally very interested to re-establish connections with Iran and claim that there is a real movement happening in this area.


In an interview with IRNA in London, and commenting on her opinion about the current banking situation, Millar said, 'We act for the British Iranian banks and have been heavily involved in discussions with industries, the regulatory authority and the government about how to break the banking impasse.

The good news is that there is a real movement and it is well intended, but it is frustratingly slow.'

On the reason why things are moving slow, she said, 'It is a combination of the architecture of the banking system in the UK which is different to the architecture to the banking system in Europe.

Each bank has a direct clearing relationship in Europe, but here in the UK you clear through another bank and those are the banks tend to be large banks who have found themselves on the wrong side of very large penalties from the US.

So they are naturally far more cautious than as warranted.'

Q. To a question if there is a prospect of normalization of banking system between Britain and Iran, the British expert said,' I think there is and it will happen. I am a long term optimist. I have said this and would say just wait another six months.

The banking industry in the UK are generally always very interested in Iran, but they want to be second or third in. They like to see what the other banks do first.

I think there are relatively simple steps that could be put in place to resolve this and I think that there is a political will to do so, but previously the UK government was looking for the commercial sector to fill the gap and now I think there is a grown realization that there might need to be some intervention.'

On the the impact of Brexit on trade with Iran, she said, 'It is a difficult question, but if the reality is that we are not going to have any deals with the EU and we are just going to be a trading partner like anyone else, it certainly is the case that the UK needs to find additional market.

Brexit should act as an accelerator real trade with Iran.'

Asked if Donald Trump retreats from JCPOA, would Britain preserve its position, the British sepert said, 'I think so far as the JCPOA is concerned, the next president is irrelevant to JCPOA. By that, I mean that in order to tear up the JCPOA it has to be on the basis that Iran has breached the fundamentals of its obligation.

What the US or any other signatories cannot do is just to say I am walking away from their international obligation. I do not think that is going to happen. I think the JCPOA will hold and I do think that the next president is irrelevant to the question of the future of the JCPOA.

*Sue Millar is a finance litigation specialist. She focuses on investment banking disputes, involving highly complex products and structures. Her expertise extends to commercial and private banking and trade finance disputes.

 Iranian diplomat said on Monday that Minister of Cooperatives, Labor and Social Welfare Ali Rabiei would pay an official visit to Singapore on May 18.


 Iran's Ambassador to Singapore Javad Ansari said the visit is aimed at fostering all-out mutual relations.

This is the third visit by an Iranian delegation at the ministerial level to Singapore in the past three months, said the ambassador.

Ansari underscored that Rabiei, heading a high-ranking delegation, would travel to Singapore on Wednesday (May 18) for a three-day visit which is to take place upon an official invitation by his Singaporean counterpart S. Iswaran.

While in Singapore, Rabiei is scheduled to hold talks with several high-ranking Singaporean ministers as well as the country's state and private sectors officials on reinforcing mutual cooperation.

The diplomat further added a memorandum of understanding (MoU) is to be inked, during the Iranian minister's visit, for promoting bilateral trade and petrochemical cooperation between the two countries.

'Following the removal of sanctions against Iran, the Singaporean government announced there is no limitation for expansion of trade cooperation with Iran,' he said.

Anti-Iran sanctions were lifted on January 16 following the implementation of the Joint Comprehensive Plan of Action (JCPOA) which was made between Iran and the world six major powers on July 14, 2015.

Touching upon the two countries relations in oil, gas and petrochemical sectors, the Iranian diplomat said Iran and Singapore share a strong will for enhancing mutual cooperation in those fields.

Pointing to high-capacities of Singapore's power plants, Ansari said thanks to removal of the anti-Iran sanctions, Tehran is ready to supply more oil for the Asian country.

Iran-Singapore trade volume was over than 5.5 million dollars in 2011. The figure decreased to 2.1 million dollars in 2012 due the unilateral sanctions of Western countries against Iran.

After removal of the sanctions in the post-JCPOA era, officials of both countries are trying to increase trade volume between the two nations.

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Governor of Marand city Taqi Karami said on Tuesday that Dutch investors are willing to make joint venture investment to produce saffron in the city.


Marand with suitable climate is the best location in northwest of the country to cultivate agricultural products with low level water consumption, especially saffron.
Karami made the remarks in a meeting with 5-member Dutch delegation on Tuesday.
He said that 115 hectares of agricultural land in the city allocated to cultivation of saffron, which is supposed to increase in five years to 300 hectares.
The governor said that in the past year Marand could produce 400 kilograms of saffron by 198 farmers and now is as a hub for saffron in northwestern Iran.
He said that Marand is ready for cooperation in the field of purchasing saffron bulbs from the Netherlands, allocation of lands for cultivation of saffron and its export with brand of Marand city and processing under license of the Netherlands.
Head of Dutch delegation Robert Vander Tang said that the visit aims to increase cooperation on cultivation of crops with low level water consumption such as saffron and roses.
He said that growing saffron bulbs by traditional method in Marand takes seven years, but, the industrial methods help the growth in less than one year.
Vander Tang said producing the crops in the Netherlands is difficult, because of rains, but it is exported to 23 countries of the world.
The Dutch delegation visited saffron and roses farms in Marand and evaluated their qualification high, calling for more cooperation between the two countries on sharing experience.
Marand is situated 71 km northeast of Tabriz.

Big winners of Iran’s e-commerce boom in the past few years have made their brands household names. However, according to data released in January, these brands may have hit their peak.

Now according to Alexa Analytics service rankings, the top three online shopping portals are DigiKala.com (#3), Divar.ir (#12), Bamilo (#17) respectively.

The two stores and one private-listings site have ranked roughly in the same slot for the past few years. Does that mean the industry has peaked?

A glance at the past six months of views and comments about the sites, one pattern is glaringly obvious -- growth has petered out.  

The first website digikala.com, which has claimed on several occasions to be the most popular online shop in Iran, saw a slight dip in views recently according to another analytics firm Similar Web.

In August 2016, DigiKala had some 15.2 million views, while in January 2017 the portal had 13.7 million hits which is 9% drop through the period.

The leveling out of DigiKala’s numbers comes despite the company’s push to expand the range of products and services; for instance expanding their ranges to include home furnishings and even brand new cars. Like Amazon in the US, DigiKala aims to become the one-stop-shop for all purchases – beyond its original digital consumer goods role, however, the Iranian market has not yet responded in the same manner.  

Meanwhile, the second most visited e-commerce portal bamilo.com – backed by Germany’s Rocket Internet group has seen an improvement over the same six month period.

That site had 4 million views in August 2016, whereas in January 2017 it saw 4.3 million visits meaning a 6-month growth of 7.4%. Bamilo’s management has used several tactics to grow their market share against DigiKala in recent months including large advertising campaigns in collaboration with MTN-Irancell (which is a part owner of the parent company) to push their products on that mobile operator.  

The next most visited shopping site is divar.ir, a site dedicated to selling new and secondhand items. Divar also follows the same descending order regarding weak or even non-existent growth in the half-year period.

According to the statistics, Divar had 5.5 million hits in August of last year with website views dipping in January to 5.45 million. That website saw a 0.9% drop in the number of visitors.

For Divar specifically social media messaging apps like Telegram and Instagram are raising the prospect of further competition. As more mobile users switch to those ‘walled-off gardens’ to sell their items regular retailers and listings websites could begin to suffer.

Outside of the top 20, other well-used Internet shopping have also seen tepid growth.

One such site is bama.ir, one of the oldest online car sales websites in Iran. This website saw 2.85 million hits in August 2016 and 2.95 million hits in January, according to the online analytics tool. In total that website saw a 3.5% growth over the six-month period.

The researched six-month period is not a confirmation that these sites have maxed out their pool of viewers and customers. Late February and March leading up to Nowruz, the Persian New Year, are usually seen as the best shopping months in Iran.

However, if the past six months are anything to go by, it seems that the market has started to level out and growth in the industry may need to be sought on other new or future platforms.

 

Ecuadorian Foreign Trade Minister Diego Aulestia announced that it will establish a trade office in Tehran in the coming days with the aim of introducing exports and expansion of markets in the Middle East region.


He said that the advantages of setting up trade office in Iran will result in boosting exports, providing better living conditions for the people of Ecuador and improving the production cycle for creation of job opportunities.

Aulestia said that the Iranian companies will attend the upcoming economic talks in Ecuador.

Iran has been seeking to broaden ties and cooperation with Latin American states, including Venezuela, Bolivia, Brazil, Ecuador, Nicaragua, Cuba, Mexico and Colombia.

Iran's strong and rapidly growing ties with Latin America have raised eyebrows in the US and its western allies since Tehran and Latin nations have forged an alliance against the imperialist and colonialist powers and are striving hard to reinvigorate their relations with the other independent countries which pursue a line of policy independent from the US.

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A delegation of European Union officials visited Iran from 11-14 July to discuss deeper cooperation in the fields of economic policy, trade, investment and finance. The European Union is the largest integrated market in the world, comprising over 500 million people and represents a major opportunity for two-way economic and investment flows.

The visit was led by Eric Mamer, Director at the European Commission Directorate General for Internal market, Industry, Entrepreneurship and SME's. Meetings were held with counterparts in the Iranian administration, including the Ministry of Industry, Mines and Trade; the Ministry of Economy and Finance; the Central Bank; the Customs Administration and the Iranian Chamber of Commerce. Members of the EU delegation also included officials from the Commission Services for Trade, Economy and Finance, Taxation and Customs, External Action Service and representatives from the European Central Bank and the European Investment Bank.


As recently stated by the High Representative, Federica Mogherini, at the time of the high level visit to Tehran on 16 April, the European Union actively supports Iran's integration in the world economy and its membership in the World Trade Organization.

During the current visit and as a follow up to the joint statement by the High Representative and Foreign Minister Zarif, it was agreed to initiate a broad based industrial dialogue to be launched on the occasion of a “European Economic Mission” to Teheran, planned for 17-19 October, to be led by EU Commissioner Elzbieta Bienkowska, together with representatives of European Business associations. This dialogue could cover a number of key sectors of mutual interest such as textile, automotive, raw materials, tourism and construction, but also horizontal issues like business environment and SME Development. In addition, a regular macro-economic dialogue is envisaged with the Ministry of Economy and Finance."

Deputy Commercial Manager of SAIPA auto making group Hassan Baghaei said on Saturday that the group has inked a one-billion-dollar finance deal with South Korean company SK networks.


 Baghaei said following preliminary talks between the two sides, the deal was inked on Friday.
The South Korean company is to finance SAIPA's purchase of dlrs one billion worth of spare parts in complete knock-down (CKD), he said.
Talks between the two companies on joint venture investment is now underway, he said.
SAIPA has recently placed a dlrs. 250,000 order for purchase of auto-parts from South Korean company, he said.
During the recent visit of the South Korean president to Iran, 19 memoranda of understanding (MoUs) on broadening of mutual economic cooperation were inked between the two countries.

A senior Iranian official says millions of foreign tourists spent nearly eight billion dollars in the country last year.

Masoud Soltanifar, head of Iran's Cultural Heritage, Handicrafts and Tourism Organization, told reporters on Monday that some five million foreign tourists visited Iran last year, spending at least 7.5 billion dollars.

“Currently, the country’s income from tourism industry accounts for half a percent of the global revenue,” Soltanifar said, adding that the government seeks to increase the figure to two percent by 2025, IRNA reported.

The senior official, who is also a deputy to the Iranian president, noted that Iran ranks 47th on the list of countries with highest tourist number, saying that given its tourist destinations, the country needs to attract some 20 million foreign visitors by 2025.

A New York Times report last month said tour operators in America have been speaking of a surge in bookings by many Americans who, undeterred by a State Department warning about travel risks to Iran, are keen on visiting the country.

Iranian officials told the Associated Press last fall that the country’s tourism sector aims to attract $30 billion by 2025.

Iran hosts some of the world’s oldest cultural monuments, including 19 UNESCO World Heritage Sites, and its varied terrain ranges from desert locales to ski resorts.

Iran tourism, however, reportedly suffers some deficiencies such as shortage of enough hotels and some financial restrictions for foreign money transfers.

Officials say hotel groups from Germany, Greece, South Korea and Singapore traveled to Iran last year for talks on hotel construction.

Europe’s largest hotel group Accor has already built two four-star hotels at Imam Khomeini International Airport outside the capital, Tehran.

Also, the UAE-based Rotana plans to open a five-star 600-room hotel in Tehran and another in the city of Mashhad, which attracts millions of pilgrims each year.

German Minister of Food and Agriculture Christian Schmidt is to pay an official visit to Iran for economic and political negotiations with the Iranian officials on Saturday.
[German agriculture minister to visit Tehran on Saturday]

Spokesman of the German ministry of agriculture made the remark in an interview with reporters on Friday.
During his two-day stay in Iran, the German high ranking delegation is to meet with Iran's Minister of Agriculture Jihad Mahmoud Hojati and member of Iran's Chamber of Commerce, Industries and Mine on issues of mutual interest.
The visit is to broaden economic cooperation mainly after removal of economic sanctions against Iran and sound implementation of the Joint Comprehensive Plan of Action (JCPOA).

‘Richard Dalton’ President of British Iranian Chamber of Commerce expressed optimism about the future outlook for bilateral relationship between Iran and Britain and said interest in Iranian market by the British companies is growing.

Speaking to IRNA, Dalton, who previously served as the ambassador of Britain in Iran said: 'I am optimistic about the outlook for Britain’s relationship with Iran, both politically and commercially.'

He added: “Clearly both sides want to proceed cautiously, but the range of British companies interested in the Iranian market is growing everyday”.

Dalton said: “We believe the expertise that we possess, from infrastructure through oil and gas industry to automotive sector to financial services and consumer goods, can be of real interest to the Iranian government and to Iranian business people and I am delighted that was the framework now been set clearly by governments.”

Evidence shows that the British government is now taking pragmatic approach towards the Iranian market which is already been targeted by EU rivals.

British prime minister, David Cameron rebuked Barclays Bank recently for hampering British companies trying to export to Iran as ministers prepare for a high-level trade mission.

Also earlier last week, ‘Sajid Javid’, British business secretary used the term ‘Unlimited’ business opportunities in Iran, when speaking to the business leaders at a conference in London on Wednesday.

He also revealed his plan to lead a delegation of British companies in May to take advantage of the recent lifting of sanctions against Tehran.

After lifting a range of EU and US economic sanctions, trade missions has been landing in Tehran to secure businesses with the second largest economy in the region.

However Britain has been cautious in opening up its businesses to the country, claiming that it had encountered severe penalties by the American banking regulators.

Lord Lamont, Chairman of BICC told IRNA: Some [British banks] have deferred prosecution agreements while some are still arguing with American regulators. But I think we are beginning to see signs of some of the smaller banks coming back and I think it will be like a pebble that starts the bigger stones rolling.

Dr. Mohammed Nahavandian, the chief of Staff to the Iranian president who made a visit to London earlier last week, also reiterated West’s commitment in facilitating trade with Iran according to JCPOA.

Speaking at RUSI, Nahavandian said: 'There was a commitment that the US and European governments took on themselves to take adequate administrative and regulatory measures to ensure clarity and effectiveness of the removal of sanctions.'

He stressed that “time is of essence and those who act quick get the best results

Source:IRNA

Sky News  reported  that some of the country’s biggest banks have been invited to a meeting with US Secretary of State John Kerry to discuss the openings that the removal of sanctions against Iran have created for them over their banking transactions with the country.      

 The British Bankers' Association (BBA) has officially invited its members to send their senior representatives to the meeting with Secretary Kerry.  The meeting will take place later this week as he visits London for an anti-corruption summit.

The discussions will be held against an uncertain backdrop for UK banks, some of which are keen to do more business with Tehran but remain nervous about the consequences of deals which may be frowned upon by Washington, added Sky News.

This week's meeting will take place just weeks after the banking industry's main lobbying group moved to establish a high-level panel to navigate the removal of western sanctions against Iran.

British banks have come under pressure from the Government to expand links with Tehran.  

Sources said that many BBA members, which include UK-headquartered and international banks with operations in Britain, had expressed unease about forging closer ties with Iran.

Also, UK-based exporters have reportedly complained that they have already slipped behind their competitors from France, Germany and Italy over new business opportunities in Iran.

Lord Lamont, who has been appointed as the Prime Minister's trade envoy to Iran, has already acknowledged that the UK was trailing its European rivals.

"Britain suffered a bit because the Government not only enforced sanctions but actively discouraged even legal trade while sanctions were in place, the result was that British trade collapsed by much more than that of Germany, France, Italy," he told Sky News in an interview in February.

"Even America has exported more to Iran recently than we have."

The anxiety among some London-based bankers stems both from US lenders and American executives who work for British and other international banks.

Banks including Standard Chartered have been fined heavily for breaching sanctions against Iran in recent years, adds the report by Sky News.

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WBY talks to Andreas Schweitzer , Senior Managing Partner  of Arjan Capital , on the significance of the Iranian market, investment challenges , the regulatory environment, and expectations for the future in foreign Investors .

Mr. Schweitzer is a CEO with expertise in start ups, SME’s and frontier markets business development and also  serves as an advisor to the trade and commodity division of Metallco International Ltd, a 40-year-old industrial merchant company specializing in automotive/rail, power generation, offset- and counter trade.

Since 2009, Mr. Schweitzer has had an active presence in Iran, advising international industrial and investment companies targeting the Iranian market, as well as facilitating sanctions-compliant industrial and commercial activity. Mr. Schweitzer is a member of a Swiss-Iranian investor group that procured licenses for wind farms in Iran.

In 2004, Mr. Schweitzer co-founded a company that developed a hydro-electronic power drive systems for mid-sized, on- and off-grid wind turbines. Previously, Mr. Schweitzer created and managed a US$ 200 million market-timing fund; and has held management positions at Jacobs Suchard (now Kraft Foods Schweiz AG), in France, Panama, Switzerland, India and the UK.

Mr. Schweitzer has been a founding partner of startups and served in executive roles in international banks European asset management firms including A. Sarasin & Cie (1980-1983) Jacobs Suchard AG(1984-90) and Kenk & Schweitzer Associés (1990-1994). Mr. Schweitzer serves on a number of SME boards of directors and is actively involved in the Young Presidents’ Organization (YPO).

When did Arjan Capital establish its operations in Iran?

I started as an investor in Iran in 2009. In 2014 I have been invited to speak at one of the early Iran conferences in London.  As a result, three EU Multinationals approached me to assist them in the execution of their Iran strategy. This was the birth of Arjan Capital Ltd., a sanction compliant company, assisting these international companies. Arjan was created by its partner that come from investment banking, law and industry. We established an EU regulated company in Malta and an own law practice in Tehran. Iranian project owners has high expectation. There are many opportunities in Iran for investment but  less feasibility studies has been done for projects. I think Iran has more opportunities for investment more than fiance or loan, because investor will have projects at the end.

How would you characterize the regional market and your company role as project financier?

We focus on Iran where we consider the need and the opportunity lies.  However, we believe that truly well managed Iranian companies could benefit from a significant advantage as a high class regional exporter. Iran could also become an interesting base for international companies as a manufacturing and know how hub.
What services are you promoting in order to attract a larger customer base and expand your market share?
We support companies to get financing, finding partners, and or investors. We are currently supporting a Swiss company launching a receivable financing fund, assisting EU and Swiss exporters to safely export to Central Asia and in particular to Iran.
We advise on company creation, setup, staffing and management. In summary Arjan Capital is the initial CEO office for international companies coming to Iran.

What challenges do you  face for doing your business in Iran   compared to other countries?

Due to 30 years of isolation there is still a gap of understanding between Iran and the international markets. This situation is similar to the GDR, former East-Germany. Iranian companies are well advised to go abroad to present themselves to the international financial sector. This requires preparation and a budget and in our experience unfortunately not many Iranian companies are willing to undertake either and believe that investors will accept local rules established over 30 years.

What are the strengths and weaknesses of Iranian projects for investment or financing?

I consider Iran fertile ground for international industrial investors and companies interested to sell or manufacture locally. Here are great JV opportunities. I further believe that financial investors will remain cautious due to the not yet lifted secondary US sanctions and the lack of business transparency.
  Mid size projects in the sectors of agriculture, mining and mining services petrochemical, hospitality (hotels and hospitals) has high change for attracting foreign investors.

What criteria are you looking for in these projects?

Clear business proposition and a willingness from the Iranian project owner to provide transparenet expected by international investors

How would you evaluate your position in the market?

This is for the competition to judge, Due to the fact that I am an investor in Iran since 2009 and we are present on the ground we can provide added value to international companies coming to Iran and Iranian companies looking for international partnership and financing.

What are your expectations for 2017?

The market will slowly improve and open. The key factors to growth in Iran are funding, hence a financial system related to international markets and the build up of infrastructure (ports, storage) as well as custom services.

What is your message for international business and investment community?

To do business in Iran you need 3 things: time, money and good nerves. International companies with a long term strategy will succeed.