Kunlun is the main official channel for money flows between China and Iran. REUTERS/Stringer
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Bank of Kunlun Co., the key Chinese conduit for transactions with Iran, is set to halt handling payments from the Islamic Republic under pressure of imminent U.S. sanctions against the country, four sources familiar with the matter told Reuters. Kunlun, the main official channel for money flows between China and Iran, has verbally informed clients that it will stop accepting yuan-denominated Iranian payments to China from Nov. 1, said the sources, who include external loan agents and business officials who trade with Iran.The bank, which is controlled by the financial arm of Chinese state energy group CNPC, had already quietly suspended euro-denominated payments from Iran in late August, the four sources said, declining to be identified due to the sensitivity of the matter. It was also not clear whether the bank's services settling China's payments for Iranian oil purchases would be affected.China is the top buyer of Iranian oil and nearly all of its oil payments go through Kunlun. China had been buying some $1.5 billion worth of oil each month from Iran as recently as September. Most of what China imports from Iran is oil.
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