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The UK subsidiary of Qatar Islamic Bank (QIB) has been fined £1.4m ($2m) by local banking regulator the Prudential Regulation Authority (PRA) for “significant failings in assessing, maintaining and reporting to the regulator on its financial resources”.The fine relates to the period 30 June 2011-31 December 2012 when QIB-UK failed to undertake regular assessments of its capital or report high levels of exposure to a group of connected companies.

Governments continue to put pressure on the United States to relax, or at least further clarify, its attitude to major European banks doing business with Iran. The issue has become the most significant obstacle in the way of international companies taking advantage of the relaxation of sanctions in January. Despite further talks in recent days there is still no breakthrough, to the frustration of Iranian and European officials and companies. The key problem stems from delayed prosecution agreements that major international banks struck with the US Treasury and its Office of Foreign Assets Control (Ofac) enforcement arm, after past breaches of sanctions.

A delegation of senior Iranian officials who visited London in early March had a few closely-intertwined tasks on their agenda: to drum up investment from UK companies, particularly oil firms, and to gain better access to the international financial system. The first cannot easily happen without the second, but neither is likely to happen quickly.While most international sanctions have been lifted this year, some US restrictions remain in place and they are having a deadening effect on international investment. The main issues are the ban on US involvement with Iranian financial institutions and the prohibition on non-US banks clearing dollar-denominated transactions involving Iran.

One of Iran’s largest banks, is to reopen its branch in the South Korean capital within the next month, and rejoin the Swift international bank messaging system, which will mean it can issue letters of credit and transact trade finance once more. Bank Mellat has succeeded in a number of court actions in Europe, declaring EU and UK sanctions against it as unlawful; it is pursuing a £2.3bn ($4bn) damages against the UK government for losses caused while under sanctions.

Standard & Poor’s (S&P) has affirmed its B- long-term and B short-term foreign and local currency sovereign credit ratings, with a stable outlook. The decision comes despite the impact of low oil prices, which is leading to sharply lower government revenues, and conflict with Islamic State (IS). The ratings agency predicts that Iraq will continue to suffer from significant fiscal pressures for the next three years.

The case filed by Oman’s State General Reserve Fund (SGRF) against Bulgaria at the International Centre for Settlement of Investment Disputes was finally constituted in mid-February. Tribunal members have been appointed: Vaughan Lowe, a practising barrister and professor at the University of Oxford’s law faculty is president; Canadian national David Haigh is the arbitrator appointed by Oman; Bulgaria has appointed French national Brigitte Stern (emeritus professor of international law at the University of Paris).

Capital Intelligence (CI) downgraded Oman’s long-term foreign and local currency ratings to A- from A and its short-term foreign and local currency ratings to A2 from A1, on 12 February. The ratings agency said the downgrade was due to a combination of a weaker-than-expected fiscal performance in the first ten months of 2015 and the likely negative consequences of a prolonged period of low oil prices. CI estimates that Oman ran a budget deficit of 17.7% of GDP in 2015; it expects the ratio to rise to 20% this year.

The business community is concerned about a slowdown in orders, late payments and non-performing loans; analysts are pessimistic about the macroeconomic outlook, in an economy still heavily dependent on hydrocarbons revenues that seems to have suffered more than its GCC partners from the slump in oil and gas prices. National Centre for Statistics and Information (NCSI) data, issued by Oman News Agency on 30 January, recorded a 14.2% year-on-year decline in gross domestic product (GDP) – to OR20.09bn ($52.2bn) at market prices – in January-September 2015.

The Gulf Co-operation Council (GCC) states have more than a dozen sovereign wealth funds (SWFs) between them, managing assets worth an estimated $2.77trn. As of 12 August 2015, this represented a staggering 38% of the total $7.28trn assets managed by SWFs around the world, according to the calculations of the Las Vegas-based Sovereign Wealth Fund Institute (SWFI).

Rather than gaining a bounce from the opening up of the Saudi stock exchange (Tadawul), regional equities markets have been hit hard in the past month by the global turmoil related in part to collapsing Chinese markets. In a 24 August note, Capital Economics said the worst Middle East and North Africa (Mena) region stock market performers were largely concentrated in the Gulf, notably Saudi Arabia, Abu Dhabi and Dubai.

The Securities and Exchange Commission (SEC) on 18 August announced that New York-based BNY Mellon has agreed to pay $14.8m to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) by providing student internships to family members of two officials at a Middle Eastern sovereign wealth fund. Without admitting or denying the findings, the company has agreed to pay $8.3m in disgorgement, $1.5m in prejudgment interest and a $5m penalty

The deal between Tehran and the P5+1 powers over Iran’s nuclear programme should, as international sanctions are lifted, eventually make Iran the biggest economy to rejoin the global trading and financial system since the break-up of the Soviet Union over two decades ago. The World Bank has forecast that the deal will add 1m b/d of crude, reduce oil prices by $10/bbl in 2016 and drive Iran’s economic growth to 5% in 2016 from 3% this year. On 12 August, Switzerland became the first nation to remove sanctions.

Banks in several of the Gulf’s main financial centres – including Dubai, Kuwait and Qatar – have been developing working relationships with the UK authorities, who, given London’s prominence as an international financial centre, have potentially valuable experience in tackling funding flows going to Islamic State (IS) and other radical groups involved in fighting in Syria and Iraq. It is not yet clear how deep this co-operation runs. One person involved in the process described the relationship as “a work in progress”.

The Islamic banking and finance industry has a long history in the Gulf states. When Dubai Islamic Bank (DIB) opened for business in 1976, it became the first Islamic retail bank in the world. Since then, the Gulf has been a key player in an industry that has grown dramatically in the last decade, with an asset base that has doubled in the five years to 2014, when it stood at nearly $2tr, 60% of which is located in the Gulf Co-operation Council (GCC) region.

Dubai Investments (DI), 11.5%-owned by Investment Corporation of Dubai and the largest investment company listed on the Dubai Financial Market (DFM), is looking to invest in oil-rich Angola and has paid around $400m for land in Saudi Arabia, as it internationalises its growth strategy. Announcing plans to float shares in at least one of its subsidiaries in 2016, chief executive Khalid Bin Kalban told reporters in mid-March that the company wanted to build industrial zones in Angola and Riyadh, modelled on its flagship Dubai Investments Park.