Iranian petrochemical exports to China have stopped since May because of banking problems, according to Iran’s Press TV. Marzieh Shahdaei, managing director of Iran’s National Petrochemical Co. (NPC), told the Iranian news network that Chinese banks are refusing to pay Iranian exporters because of domestic regulations against money laundering that went into effect on May 1.

Shahdaei said Iran is keen on expanding petrochemical trade with China, but top-level intervention by the countries’ governments is needed to restart exports. “The problem associated with China's payment for its petrochemical imports from Iran has now reached a point that requires negotiations between senior officials from both sides,” she told the Islamic Republic News Agency (IRNA), adding that certain regulations in China needed to be amended in order for Iran’s petrochemical exports to the country to restart.

However, IRNA quotes Mehdi Sharifi Niknafs, managing director of the Iranian Petrochemical Commercial Company (IPCC), as saying that payments for petrochemical sales to China have not been blocked by Chinese banks but rather delayed because of the stricter regulations now in place. Niknafs warned that the current halt in exports could hurt the Iranian petrochemical industry as the country exports nearly 40% of its petrochemicals production to China.

A report by the Iran-China Chamber of Commerce and Industries in June showed that Iran exported 21.12 million t of commodities, mainly oil and petrochemical products, worth $6.4 billion to China in the first quarter of 2017.