The document discusses how Swiss banks and trading companies have found themselves caught between Iranian sanctions imposed by the United States. It describes how one Swiss company, Swiss Tankers, delivered oil to Syria in 2017 and came under scrutiny from the US, but was able to resolve the issue with the help of a former senior Swiss official well-connected in Washington. It questions what Switzerland may have offered the US in return. It also notes how Swiss entities are warned against circumventing US sanctions but that there are sometimes "shortcuts."

1. 1
Iran Sanctions: Banks and Trading
Companies Are In The Same
Boat.
It is a movie in the League of Sergio Leone's "Once Upon a Time in
America`" It has a complex structure, and it's a slow burn, but it is for
mature viewers.
A good Zurich Geschäftsmann came into Washington’s sights for Oil exports
from Syria in 2017… This has caught the attention of sources with substantiate
credentials and clearance in the sanctuary of the security domain... The Swiss
Tankers miraculously emerged unscathed thanks to a special advisor with "Un-
official function(s)" (Ex-high-ranking official in the Swiss Government 🇨🇭 who
dealt with D.C. (acquainted with the Secretary of State of several U.S
administrations).
The Swiss are too often "conditioned” to acquiesce the Suisse-Romandie
scandals more than any Swiss-German Zurich-made wrongdoings (Swiss-Air
bankruptcy, the Hildebrand scandal, the Arms sales to authoritarian regimes, with
all the associated crazy parties between friends at the Globe club).
They took care that the little affair between Zürischnure did not spill too much on
the political class.
But one question remains to be elucidated: what (Who ??? more specifically) the
Swiss could have given to the U.S in return ?
"Could ________use a complex system of currency or shipping contracts to
extract the Premia in Iranian oil markets ?"
They are two tunnel visions in this world: those "who have" and those haven't"
the banking culture.
For the people in the former category, the following is an absurd and quasi
impossible proposition to rationalize. -The gnomes, who lately became super
paranoid on Iran CRUDE, do not touch anything related to Iran, have red flags on
vessel having been recently to Iranian coast.
It also means that they will not deal with refiners thecnically suited for Iranian
crude oil. A Military officer of a Geneva-based bank says:

2. 2
"Banque de Commerce et de Placements and BNP have stopped financing
Naftiran after the U.S related sanctions BUT in a world largely dominated by
mega bank RCFs lending in leap to traders financing the 'commodity trade
finance' who really knows ? (...) "Not a silly question when commodity traders
elect to lend their credit to another counterparty... `
but we will let to our readers imagination to figure out who belongs to the "2nd
category" !
Left-Shore, Geneve
via jacquessimon506.files.wordpress
Iran 2nd most important man paid a courtesy visit to Alain Berset, head of the
Federal Council in Bern, Switzerland following POTUS's Decision to Withdraw
From the P5+1 Joint Comprehensive Plan of Action (JCPOA).
Likely Hassan Rouhani had oil & trade a posteriori in mind.
One week earlier, the US State Department said it would give no waivers for
NIOC’s oil buyers who will be expected to cut their procurement to zero under
sanctions.

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Sources in the underground tunnels connecting Rue du Rhône to l'Ile-au-centre
have informed me that the Iranian are "baffled" by the Swiss Operators.
Switzerland represents the United States in Iran following the seizure of the U.S.
Embassy by Tehran in 1979. (The Switzerland "neutrality" and mediation
diplomacy function at works).
 State Secretariat for Economic Affairs (SECO) warns against business-
minded entities who might facilitate the circumventing of the U.S
sanctions, in particular related to the use of the U.S Dollar with
counterparties targeted as Foreign Sanctions Evaders by the U.S
Treasury Department and for which Bern has not planned any financial
liability or compensation regime.
 Under Executive Order 13608 of May 1, 2012, “Prohibiting Certain
Transactions With and Suspending Entry Into the United States of Foreign
Sanctions Evaders With Respect to Iran and Syria,” the U.S. Department
of the Treasury is charged with identifying foreign parties that evade U.S.
sanctions against Iran or Syria and bar those parties’ access to U.S.
markets.
 Third-country exchange houses are financial institutions licensed to deal in
foreign exchange and transmit funds on
behalf of individuals and companies.
 Trading companies are entities that are not licensed to transmit funds, but
in practice operate as exchange houses and rely upon their bank accounts
to transmit funds on behalf of third parties.
 In addition, the Regulations require the blocking of property and interests
in property of the Government of Iran, including the Central Bank of Iran,
and of Iranian financial institutions unless the dealing in such property is
exempted by statute or authorized by OFAC.
A Made in Zurich Affair
Advisor with un-official function(s)
Ironically a Swiss company found itself in Washington's sights when Swiss-
flagged tankers delivered oil to Syria in 2017...
According to indiscretions obtained by Argauer Zeitung, the whole affair was
finally solved thanks to special skills of Michael Eichmann, former senior official
(who spent more than 20 years at the Federal Office for Economic Supply
(OFAE).
He cleared the ground for his friend Hansjürg Grunder of Swiss Tankers as
"Advisor"... "on the basis of the national interest".

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It is because the Confederation would have been impacted. The Swiss merchant
marine was created in 1941 in the turmoil of the Second World War, to ensure
the country supply of goods and about twenty ships were still financed via
guaranteed federal loans...
Public money was injected (CHF 215M) in emergency to save the fleet in 2017
and UBS could too have been fined since was banking for Mega Chemical
Schifffahrt AG, a Zurich company.
The Swiss Tankers miraculously emerged unscathed thanks to the special
advisor very acquainted with the Secretary of State of several U.S
administrations.
Interestingly enough they took care that the little affair between Zürischnure did
not spill too much on the political class.
But one question remains to be elucidated: what (who ??? more specifically)
could the Swiss have given to the U.S in return ?
Only few knows... Secret.
The Swiss "are conditioned" to acquiesce the Suisse-Romandie breach in ethics
more than any Swiss-German & Zurich-Made wrongdoings (such the Swiss-Air
bankruptcy, the Hildebrand scandal or the Arms sales to authoritarian regimes).
"They are rules, but shortcuts also exist".
Banque de Commerce et de Placements S.A

5. 5
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Read also
Are these turnovers real ? Backed by physical volume ? Answer is: quite often
honestly they don’t know.
MACQUARIE doesn’t know. Even BNP doesn’t know. ING Belgique Bruxelles
Suisse… etc
********************************************************************************************
Margins for physical now are mostly volume driven.
No longer are the old days of hidden information which was an advantage in pure
physical arbitrage trading. The physical is just used against their leveraged
position when they moved the market.
Like how Shell and HETCO did in the past against the fundamentals of S&D (...)
and the whole world was wondering why prices were rising when there was
ample supply ? Of course they will just tell everyone they're buying for their
systems and refineries which was a total non-sense while what they just want is
to move the market.
Globalization is just trying to make markets transparent unless... one who keep
extra lengths and dares to do a discounted Khargh to South Africa trade...
Find out who will next die hero of Commodity Capitalism in the Bloomberg

6. 6
OFF-STAGE CONVO AT LE BEAU RIVAGE PALACE
Mercuria Energy Trading S.A. approached NIOC in 2016 (post-embargo) to
supply the Condensates crude oil to China. At that time they thought they had the
deal with IRAN but the truth is that return was not compelling-within a +-5% sea
allowance, so Mercuria backed-out.
They realized that NIOC knew the value of their crude to the nearest -+10c or
perhaps market knew.
As a matter of fact, 50 rue du Rhône spent ~6 Months, approved resources on
this eldorado, paid Lawyers (they even had an euro currency borrowing base-line
ready but came empty-handed).
Mercuria Trading got stunted by NIOC as they had just re-entered the market
after 10 years break.
They had miscalculated Iran, who during the negotiations had informations and
was running tankers on their own. (months ahead)- During the sanctions, they
needed hush-hush ships but once the UN lifted the Sanctions they didn't.
The Traders had suddenly very few price discovery role there... the Iran trade
was quasi-instantly gone !
END OF THE OFF-STAGE CONVO
As shown by recent settlements regulators will continue to scrutinize transactions
involving countries that are subject to US economic sanctions for compliance
with OFAC regulations.
American authorities are reinforcing sanctions especially against Iran putting
pressure on the banks to exclude Iranian access to the American financial
system.
It becomes a real challenge for the banks now to comply with sanctions as banks
need to be conscious of the complexity and nuances of sanction law, to have a
global clear sanction policy, technological base and competent staff.
Jacques S.

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