Japan banks to refrain from deals with Iran bank

TOKYO: Three Japanese major banks will refrain from doing business with Iran's state-run bank in line with US financial sanctions, reports said on Saturday.        

The Bank of Tokyo-Mitsubishi UFJ, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corp. will not deal with Bank Saderat Iran, the Jiji and Kyodo news agencies said.        

The United States has imposed a ban on US bank transactions with Bank Saderat Iran, insisting that Iran is channeling funds to Hezbollah in Lebanon through the export bank, the reports said.          

The three Japanese banks have branches in the United States and decided to suspend transactions with the Iranian bank, while other Japanese banks operating in the United States are expected to follow suit, the Kyodo said.     

Japan, the world's second largest economy, is almost entirely dependent on the Middle East for its oil, and it imports about 15 percent of its total oil consumption from Iran.              

Iran and Japan's Inpex Corp. signed in February 2004 an agreement for development of Azadegan, the Islamic republic's largest onshore oil field. Work was meant to start by March 2005 but has been delayed.              

Japan has been under US pressure to abandon the deal as Washington seeks to ratchet up international pressure on Iran over its nuclear program.             

Japan has expressed caution about sanctions on Iran, while calling on Tehran to be transparent about its nuclear programme -- which Iran contends is for peaceful purposes.