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* Iran wants economic sanctions lifted
* Banks wary of falling foul of U.S. regulations
* Iran keen to speed up humanitarian trade plan
By Jonathan Saul and Parisa Hafezi
LONDON/ANKARA, March 13 (Reuters) - Despite a diplomaticthaw, Western banks are steering clear of attempts by Iran toget them involved in financing humanitarian transactions,fearing they could be penalised under U.S. sanctions, bankersand government officials told Reuters.
Iran was never barred from buying food or other humanitariangoods under sanctions imposed because of its disputed nuclearprogramme, but measures by the European Union and the UnitedStates have made trade generally more difficult over the pasttwo years by hindering payments and shipping.
As part of talks in Geneva over the nuclear question, Tehranis pressing world powers to speed up trade finance arrangementson humanitarian deals involving both Western and Iranian banks,according to an Iranian government document seen by Reuters andsources familiar with the initiative.
Iranian government officials and international trade sourcessay Tehran wants to simplify complex trade finance arrangementspotentially worth billions of dollars, which would alleviatepressure on the country's sanctioned banking system.
According to a joint plan of action agreed in November inGeneva, world powers would "establish a financial channel tofacilitate humanitarian trade for Iran's domestic needs usingIranian oil revenues held abroad".
"This channel would involve specified foreign banks andnon-designated Iranian banks to be defined when establishing thechannel," the action plan said.
Iran, with its economy under severe pressure, is keen topush this process forward.
"We have been informed that according to the negotiationsand agreements done in Geneva, the possibility to exchangedirect LCs (letters of credit) between seven European banks andeight Iranian banks for food, medication and humanitarian goodshas been provided," the Iranian government document seen byReuters says, although it made clear this was not final.
"Please note, that we can accept no legal liabilityregarding this information as it remains to be officiallyconfirmed by the responsible authorities."
BIG BANKS
The U.S. Treasury and EU officials declined to comment.
But a U.S. official told Reuters that Washington had beentalking with some banks.
"Some banks are willing to play a part here. But not all ofthem. There are a lot of big banks that have been subject tofines for engaging in transactions that were in violation ofU.S. sanctions that aren't willing to do anything - evenhumanitarian," the official said.
"They just are not willing to do business with Iran. And weare not in a position to say, you have to."
Banks may well feel the need for caution in this area.
Regulators in New York and Washington are looking atpotential violations by France's Credit Agricole andSociete Generale of U.S. sanctions imposed against countrieslike Iran, a person familiar with the investigation said.
In 2012 New York regulators threatened to revoke StandardChartered's banking licence after it broke sanctions onIran. HSBC was fined $1.92 billion by U.S. regulatorsfor various violations including doing business with Iran. InFebruary, BNP Paribas set aside $1.1 billion for apossible fine for breaching U.S. sanctions on countriesincluding Iran.
Several banking sources, speaking on condition of anonymitydue to the sensitivity of the subject, said Western banks werewary of getting involved in the latest initiative. One saidbanks would need cast iron assurances that they would not faceexposure before even considering it.
"It is only natural that banks will be cautious to what thepolitical world offers. It changes so quickly, as events inUkraine can attest," the banker said.
"What we could be looking at is very short-term financingsor involvements and structures, so you will have optionalitiesto exit should anything go wrong," he added. "Banks will needmore clarity."
INTERIM AGREEMENT
Iran and Western governments reached an interim agreement inNovember last year over Tehran's atomic work in exchange forlimited sanctions relief for six months.
By late July, Western governments hope to hammer out anaccord that would lay to rest their suspicions that Iran isseeking the capability to make a nuclear bomb, an aim it denies,while Tehran wants sanctions lifted.
Iranian government officials said the document, which hasbeen sent to Iran's Supreme National Security Council, taskedwith safeguarding Tehran's interests, listed the following banksas "available for further actions": Standard Chartered Bank(London), Societe Generale (Paris), Banque de Commerce et dePlacements (BCP) (Geneva), UniCredit Bank (Munich), Commerzbank(Frankfurt), United Bank (Zurich) and BHF Bank (Frankfurt).
It was not clear whether these banks had been approached toprovide finance. Two business executives familiar with theinitiative said they were aware that Standard Chartered, SocieteGenerale, Commerzbank were among those on the wish list.
Commerzbank, Societe Generale, United Bank and BCP alldeclined to comment. A spokeswoman for Standard Chartered saidthe bank was not involved and would not get involved in anytransaction with any party from Iran.
Unicredit said the group was "not aware of, and hence is notparticipating in any international initiative involvingfinancial institutions related to Iran subsequent to the P5+1(major powers) accord". BHF Bank said it was "not offering orproviding any financial services with links to Iran".
Swiss and German banking regulators declined to comment,although officials in Germany said if German banks were stillrigidly adhering to prohibitions on doing business with Iran,the government was ready to explain that some of thoserestrictions were eased in November.
"If banks in Germany apply the restrictions too rigidly andcautiously in financial transactions with Iran, the governmentwould encourage them to clarify the possibilities that can bedone under the agreement, not in order to relax or change thesethresholds, but to help the banks keep in compliance with theaction plan," a German finance ministry official said.
IRAN EAGER FOR DEAL
The document also named the following Iranian banks:Eghtesad Novin Bank, Parsian Bank, Bank Pasargad, KarafarinBank, Sarmaye Bank, Saman Bank, Bank Maskan and Bank Keshavarzi.
"Iranians are very eager to have this as soon as possibleand teams are working on it and all reports go to the SupremeLeader (Ayatollah Ali) Khamenei," one senior Iranian governmentofficial familiar with the nuclear talks said.
"It was an Iranian initiative but the other party (Westernpowers) also agreed on that, though they had some internaldispute on the list of Western banks," the official said.
"There have been some direct contacts between Iranians andvarious bank officials in Europe since November (the Genevadeal) but the final agreement needs more work and meetings."
The Iranian banks named in the document referred the issueto Iran's central bank, which declined to comment.
A Western diplomatic source confirmed the initiative wasunder discussion and Western powers saw such an arrangement asincreasing the transparency of trade deals.
"If you have Western banks, many of whom with U.S.operations, potentially involved in such an initiative it is abetter situation than having hundreds of middle men in suchtrades where you cannot track where the money is going. It alsoallows much stricter governance on the part of those banks. Thisis the idea at least," the diplomatic source said.
