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(Bloomberg) -- The biggest European banks, nervy of doing deals in Iran for fear of breaking laws, are free to pursue “legitimate business” there in the wake of a deal that lifted many sanctions on the country, U.S. Secretary of State John Kerry said.

“There has been a reluctance in some places to take risk,” Kerry told a group of bankers including Deutsche Bank AG Co-Chief Executive Officer John Cryan at a meeting in London Thursday, according to remarks published on the U.S. State Department website. “We want to make it clear that legitimate business, which is clear under the definition of the agreement, is available to banks.” 

Kerry has pushed through a deal under which the U.S., Russia and European countries in January lifted a series of economic sanctions on Iran in exchange for its agreement to curb nuclear activities. Yet many of the continent’s biggest banks remain unwilling to go anywhere near deals related to the Islamic Republic for fear that they will run afoul of remaining U.S. sanctions on the country.

“As long as they do their normal due diligence and know who they’re dealing with, they’re not going to be held to some undefined and inappropriate standard here,” Kerry said.

Significant restrictions remain on Iran to combat support for militant groups, human rights abuses and ballistic-missile development. A crucial ban remains on dollar-denominated trades related to Iran, scaring away most large European banks.

BNP Paribas SA, the biggest French bank, two years ago found out what it means to run afoul of Iranian sanctions. The Paris-based lender paid a record $9 billion U.S. fine in 2014 after processing banned transactions involving Cuba, Sudan and Iran.

Cryan was joined at the meeting by Credit Suisse Group AG Chief Financial Officer David Mathers and other senior European bankers, including Antonio Simoes, CEO of HSBC Bank Plc, and Tracy Clarke, head of Standard Chartered Plc for Europe and the Americas, the Foreign Office said in a statement. Michael Roemer, head of compliance at Barclays Plc, also attended, according to the statement.

“What we’re trying to address is a gap between the undoubted political commitment of the U.S. to make this agreement work in practice, to allow Iran to access the world’s trade system and the world’s finance system, and the reality of what the European banks are finding in practice,” U.K. Foreign Secretary Philip Hammond told the bankers, according to the statement. “We’re trying to bridge that gap.”

Deutsche Bank, based in Frankfurt, and Zurich-based Credit Suisse are among the biggest European lenders that say they’re generally not prepared to do business in Iran yet. Societe Generale SA, based in Paris, is also avoiding Iranian deals along with ING Groep NV in the Netherlands and the U.K.’s Standard Chartered Plc.

“The easing of U.S. and EU sanctions against Iran has increased expectations on the banking sector to support companies in their planned lawful business activities with Iran,” Charlie Olivier, a spokesman for Deutsche Bank, said in an e-mailed statement. “However, certain EU and U.S. sanctions against Iran and additional non-sanctions related restrictions remain. Therefore, Deutsche Bank continues to generally restrict business connected to Iran.”

--With assistance from Ladane Nasseri and Fabio Benedetti-Valentini To contact the reporter on this story: Donal Griffin in London at dgriffin10@bloomberg.net. To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Elisa Martinuzzi

©2016 Bloomberg L.P.

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