Wall Street Journal: The German government is investigating the activities of an Iranian-owned bank in Hamburg for its alleged work in support of Tehran’s controversial nuclear program, officials said.
The Wall Street Journal
By DAVID CRAWFORD in Berlin and PETER FRITSCH in Washington
The German government is investigating the activities of an Iranian-owned bank in Hamburg for its alleged work in support of Tehran’s controversial nuclear program, officials said.
A spokesman for the German Finance Ministry said Germany’s central bank, the Bundesbank, and Germany’s banking oversight agency, BaFin, are investigating the activities of the European-Iranian Trade Bank AG, known as EIH Bank by its German initials.
The Wall Street Journal reported Monday—citing Western officials—that EIH has done more than $1 billion worth of business on behalf of Iranian firms currently on United Nations blacklists for their alleged work on Iran’s nuclear and missile programs.
“The banking oversight currently has no findings about the infringements reported (by the Journal), but BaFin and the Bundesbank are investigating these accusations against this bank,” ministry spokesman Michael Offer told a news conference.
A spokeswoman for EIH said BaFin hasn’t found that the bank has acted in violation of United Nations or European Union sanctions. She declined to discuss details.
The bank “strictly fulfils all prevailing mandatory legal rules and export regulations, [and] obeys all sanction regulations applying in the Federal Republic of Germany and the European Community,” EIH said in a statement.
A spokesman for BaFin said the regulatory agency’s responsibilities include oversight of banking institutions’ compliance with U.N. and EU sanctions. He declined to comment on EIH or individual banks.
A spokeswoman for the German Bundesbank declined to comment.
The U.N. has imposed several sets of sanctions on Iran over its uranium enrichment program, which Western governments believe aims to create atomic weapons. Tehran says the program is for peaceful uses.
Germany and its EU partners are preparing a strengthened set of sanctions against Iran as part of their response to a recent U.N. Security Council resolution.
As part of these measures, Germany, France, Britain and other European Union members are considering new sanctions against Iran’s banking sector, a German foreign ministry spokesman said. He declined to provide details.
The U.S., France and the U.K. have been pressing the German government to act against EIH, an Iranian state-owned bank founded in Hamburg in 1971, according to people familiar with the matter. EIH is already on a U.S. Treasury blacklist.
The EU’s foreign ministers will meet July 26 to consider fresh sanctions against Iran, including sanctions against banks found to be aiding Iran’s nuclear program.
A person familiar with the discussions said an announcement of new sanctions is likely to come out of the meeting. The spokesman for the German foreign ministry declined to discuss details of the EU talks, saying they are confidential.
A person familiar with the German investigation of EIH said Germany’s banking and security agencies have kept the bank under observation for several years. The person said the monitoring is routine given the bank’s position “at the focus of a controversy.”
In particular, the officials are monitoring EIH’s compliance with U.N. directives that prohibit transactions with designated Iranian entities. EIH is still in the process of unwinding some of its long-term business relationships with blacklisted entities, the person said.
Western officials say EIH has increased its business with blacklisted companies as the web of international sanctions tightens on Iran.
U.S. pressure on other German banks has caused many to unwind their relationships with Iran. That has boosted EIH’s business financing trade with Iran in euros.