Indian Delegation Iran-Bound to Resolve Oil Import Payments .

NEW DELHI: An Indian delegation is visiting Tehran tomorrow to decide on payment options for Iranian oil imports after the SEBI (Securities and Exchange Board of India), in a move to safeguard Indian markets from money laundering and terror financing risk, urged market players to exercise caution when dealing with funds and entities from Iran.

The SEBI move came in wake of stringent UN and US sanctions on the Persian Gulf nation for its nuclear programme.Indian officials will look to work out some currency other than the US dollar to make payments for Iranian oil.

The Reserve Bank of India (RBI) had also ruled on December 23 that all trade-related payments to Iran were to be made outside the Asian Clearing Union (ACU), a regional payment mechanism that allowed companies to skirt US and European restrictions on doing business with Iran. The ACU mechanism allows payments to be made for Iranian oil and other products in US Dollars or Euros, both of which are considered ‘hard’ currencies and much needed by Iran which is facing stringent economic sanctions mandated by the UN Security Council. Iran has strongly opposed the Indian move.India imports 12 million barrels of crude oil every month from Iran, which accounts for 12 per cent of India’s crude supplies, and is its second-largest supplier behind Saudi Arabia.

The routing of payments outside the ACU is aimed at addressing US concerns. Washington leads western nations in fearing that payments through the ACU could be utilised by Iran’s government to fund for its nuclear programme.

The options for India, which would face severe petroleum shortages if it could not pay for Iranian crude oil, are to settle the payments in Euros, Yens or Dirhams.

India, as part of the United Nations must adhere to the sanctions, although it has been maintaining that sanctions only hurt ordinary citizens and not the government. India and Iran share close cultural ties and maintain close political relations, but relations have frequently been ‘stressed’ in recent months over issues like Jammu and Kashmir, Iran’s nuclear programme, the Iran-Pakistan-India gas pipeline, and gas pricing issues.

Meanwhile, SEBI has issued a note to stock exchanges and other market intermediaries asking them to ‘to give special attention to business relationships and transactions with Iran, including Iranian companies and financial institutions’ on the recommendation of the Paris-based Financial Action Task Force (FATF) of which India became a member in 2010.

India now must follow global standards set by the anti-terrorist finance regulator against money laundering and terror financing activities.

Source : thehimalayantimes.com