CARGILL, Bunge and other global traders have halted food supply deals with Iran because new U.S. sanctions have paralyzed banking systems required to secure payments, industry and Iranian government sources say.

Food, medicine and other humanitarian supplies are exempt from sanctions Washington reimposed this year after U.S. President Donald Trump said in May he was walking away from a 2015 international deal over Iran’s nuclear program.

“There is no real chance of being paid using the existing mechanisms and many international traders are unable to do new business for the moment,” said one European source with knowledge of the situation, who declined to be identified.

Western and Iranian trade sources said U.S. groups Cargill and Bunge, as well as Singapore’s Olam, were among those which could not conclude new export deals for wheat, corn, raw sugar or other commodities because Western banks would not process payments with Iran.

U.S. sanctions took full effect Nov. 5 after a winding-down period, although Washington has issued temporary waivers for some of its allies which depend on imported Iranian oil.

Iran, which relies heavily on imported food staples, has years of experience working around U.S. and other Western sanctions, which were progressively tightened between 2012 and 2015 until Iran reached a deal over its nuclear program. Many sanctions were lifted in 2016 after the pact.

Under the earlier round of sanctions, Iran had turned to a dwindling number of foreign banks that continued to act as a conduit for payments to keep food and other trade flowing.

But this time round, many of those foreign banking channels are closing down. Three Iranian officials said that banking issues were to blame for halting food and other trade.

An official with Iranian Industry, Mines and Trade Industry said only a “handful of small European banks” with no or little interaction with the United States were still doing business with Iran, and they were only involved in small-scale purchases.

“We are in talks with Europeans to expand this network of banks and financial institutions,” the ministry official said.

“But right now, many companies including Cargill and Bunge have informed us about [banking] difficulties that will force them to stop their dealings with Iran,” he said.

Swiss lender Banque de Commerce et de Placements (BCP), one of those banks that had been involved in humanitarian-related dealings in the past, said in May it was suspending all new business with Iran. (SD-Agencies)