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Japanese banks MUFG, Mizuho to stop Iranian transactions

Reuters  |  TOKYO 

By and Taiga Uranaka

TOKYO (Reuters) - Japanese banks are moving to stop handling all Iran-related transactions to meet a November deadline set by the United States, after in May pulled out of a nuclear programme agreement with

Japan's biggest bank, (MUFG), will halt all transactions to comply with the reimposition of U.S. sanctions against later this year, according to a document seen by on Thursday.

The banking unit of said later on Thursday it would take the same action. (SMBC) will carefully consider its response in compliance with the law and based on U.S. sanctions, it said in a statement emailed to

The move by MUFG is likely force a halt in Iranian purchases by Japanese companies as its banking unit handles the bulk of those imports, industry sources have told

The was fined hundreds of millions of dollars in 2014 for misleading U.S. regulators about its transactions with sanctioned countries including

"The is afraid of U.S. sanctions, so cannot handle trade transactions. Other Japanese banks are likely to be in the same position," said a Japanese who declined to be identified due to the sensitivity of the issue.

Trump in May withdrew the from a multi-party deal on Iran's nuclear programme and ordered the reimposition of U.S. sanctions against that were suspended under the 2015 agreement.

later told countries to stop buying Iran's crude oil, that nation's most important export item, by Nov. 4 or face financial consequences.

is one of the biggest buyers of Iranian crude but the country's refiners have said they may have to stop loading Iranian from October if they cannot get an exemption from U.S. sanctions to allow imports to continue.

Beyond oil, trade between and is minimal.

MUFG Ltd has informed customers in about its decision, given that dealings with Iranian financial institutions will be prohibited after a 180-day wind-down period, which ends on Nov. 4, the document showed.

MUFG may revise its policy should additional guidance be given by the United States, the bank said in the document.

MUFG did not immediately respond to a request for comment.

(Reporting by and Taiga Uranaka; Writing by Aaron Sheldrick; Editing by Jacqueline Wong, and David Evans)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, July 12 2018. 16:18 IST