A key Chinese bank is preparing to halt transactions with Iran ahead of imminent U.S. sanctions against Tehran, according to Reuters.
Kunlun, the largest conduit for money flows between China and Iran, is telling clients that it will stop processing payments from Iran starting Nov. 1, the news service reported.
“We were told that from Nov. 1 Kunlun would no longer receive payments from Iran," an executive with a Chinese manufacturer told Reuters. "That basically means Iran will have to stop importing from China."
China is Iran's top oil buyer and most of the transactions between the two countries are related to oil.
The U.S. is set to reimpose sanctions against Iran in early November following President Trump's decision to leave the Obama-era Iran nuclear deal.
The Iran deal reduced sanctions on Tehran in exchange for the country's reduction in its nuclear abilities. Now that the U.S. has left the pact, it has begun reimposing sanctions.
In August, Washington reimposed a first round of sanctions against Iran's automotive industry, as well as gold and other metals.
Beijing is facing an increasingly tenuous situation as the U.S. gears up to hit Iran's financial and oil sectors with sanctions.
A businesswoman speaking on the condition of anonymity told Reuters that it is unclear when Kunlun will restart transactions with Iran.
“Whether and when to resume the services depends on the international situation after the sanctions start on Nov. 5,” she told Reuters.
China’s exports to Iran totaled $16.4 billion in 2016 while Iran's imports totaled $14.8 billion, Reuters reported.
“A Kunlun account manager told us payments from Iran made after that date will be rejected and returned,” one source, a client of the bank, told the news service.