Double standards for Iranian depositors
E DII TO RII A L
In the light of the growing official ties between Iran and Cyprus, a number of non-political emissaries from Tehran are regularly meeting senior government officials on matters of mutual trade interest. Cyprus is keen to establish some kind of favoured status relationship in the oil and gas area and, no doubt, get something out of increased trade once the sanctions end, probably in the first quarter of 2016.
Over the past ten years or so, and despite antiIran sanctions, a significant number of Iranians have also bought property in Cyprus. Some come and go on a ‘holiday home’ basis, others actually live here with residence papers and others conduct international business.
However, over the past two years, many have experienced increasing difficulties with the Cyprus banks. Even those with long-standing accounts of more than ten years have found difficulty in getting money transferred in from abroad. Most of these problems may have stemmed from the sanctions, but these Iranians are beginning to wonder if there is something more sinister involved as they are experiencing problems with the banks beyond the actual sanctions.
Typically, even when presenting cash sums for deposit, they are being refused, with the most complaints we have received related to one primary bank that seems to be the main offender which is refusing to accept any deposits (not just electronic) to pay for mortgages that Iranians have on their Cyprus properties. Then, the bank whacks them with hefty penalties for not paying their mortgages, with one case involving so far a bank penalty of 11,000 euros and a threat of repossession.
At first glance, it looks like wilful abuse and exploitation by the bank and one can speculate that they are just cynically looking for ways to steal the money of these people. However, this is all happening quite bizarrely at a time when the two governments publicly express so much entente cordiale. Moreover, many of the individual affected are very well connected back in Iran and their anger at this mistreatment is so great that they will register at the highest level their displeasure at their treatment by Cyprus banks. One can envisage this matter spreading rapidly across the highly sophisticated social and business networks in Iran (the message is “avoid Cyprus like the plague”) and for it to be raised at the diplomatic level. Thus, just at a time when President Anastassiades is trying to improve the trade and general relations between Cyprus and Iran, someone high at the banks has directed branches to throw a spanner in the works. Why?
When the sanctions are lifted, there will be vast amounts of pent-up money coming out of Iran seeking investments of all kinds. If Cyprus banks continue to treat their existing Iranian customers so badly, it is highly unlikely that much of that new money will end up in Cyprus.