Iran’s largest bank, Bank Saderat Iran (BSI), was originally established on November 13th, 1952, and very rapidly established its credentials as a highly respected and customer-oriented institution. Having built a track record in the domestic market, BSI began its overseas operations in 1961, setting up its first branch in the German city of Hamburg. Since then, the bank’s foreign branches have gradually blossomed into regional offices and have now expanded to the point where BSI’s network of international branches is now larger than that of any other Iranian bank. In total, the bank is now represented via 20 overseas branches in Europe, the Middle East and the Persian Gulf Region. BSI also holds strategic investments in two independent banks in the UK and Uzbekistan and in two joint venture banks in Afghanistan and Bahrain. The bank also has correspondent banking relations with more than 700 banks worldwide.

As a full service bank, BSI offers a comprehensive range of trade and project finance services, as well as an extensive suite of retail banking products. In the domestic market, BSI has 3,271 branches located throughout Iran, most of which are equipped with real-time access to the SEPEHR Computerised Payment System, and 1,597 automatic teller machines (ATMs). Following a programme of investment in the bank’s electronic banking capabilities, BSI also offers its clients more than 32,000 point of sale (POS) outlets, in excess of 4.5m debit cards, and an increasingly comprehensive internet and mobile banking service.

The strength of BSI’s international and local network means that the bank plays a key role in the broader evolution of the Iranian economy, which continues to perform strongly. High oil prices have bolstered economic growth in recent years, and the IMF is forecasting that GDP will expand by around 5% this year.

Given BSI’s importance to the Iranian economy, the bank is disappointed at the decision by the US authorities in September 2006 to deny it access to US dollar clearing facilities, and to exert considerable pressure on BSI’s correspondent banks to suspend their business relations with the bank. That decision was prompted by allegations that BSI had acted as a conduit for the transfer of funds to entities in Lebanon deemed by the US authorities to be terrorist organizations. BSI takes allegations of this kind seriously and responded by instructing its internal and external auditors to undertake an extensive check of all payments made to Lebanon between 2000 and 2006. This check revealed that no payments were processed on behalf of any beneficiaries on the sanctions lists published by the US or UK authorities or by the Central Bank of the Lebanon. Requests made by BSI for evidence to substantiate the allegations made by the US authorities remain unanswered by the Office of Foreign Assets Control (OFAC).

BSI remains fully committed to supporting and enforcing anti-money laundering and terrorist financing regulations. The bank maintains comprehensive anti-money laundering procedures supplemented by regular training programmes provided to all staff.

In response to the US allegations, BSI calls on senior managers participating in the IMF session to express their opposition to the unilateral views of the US government, and to insist that the inviolable rights of monetary organisations are observed.

The US allegations are especially disappointing to BSI as they come at a time when Iran is committed to diversifying and opening its economy, promoting more inward investment and embracing privatization through the passage of Article (44). This allows for large-scale privatization in a range of key sectors of the economy.