BERLIN – The European Union is slated this week to wrap up its new round of
sanctions. The goal is to force Teheran to suspend its illicit nuclear
After years of drowsiness, the EU is now amenable to inflicting
real economic pain on the Iranian regime where it is most vulnerable – namely
its financial and energy sectors.
Germany, the key EU economic force
behind trade with Iran (roughly €4 billion annually), has thus far thrown a
wrench into the works by blocking sanctions against Iranian banking institutions
operating on German soil that are involved in financing the nuclear weapons
program. In short, Germany is the key to effective EU sanctions against Iran’s
Disclosures on Monday in The Wall
Hamburg- based European-Iranian Trade Bank AG – called EIH Bank in
“has done over a billion dollars of business for Iranian companies
with Iran’s conventional military and ballistic missile procurement
could serve as a powerful wake-up call for Berlin to drop its resistance
shutting down the four Iranian banks operating in Germany.
preliminary statements of the Finance Ministry and its Federal Financial
Supervisory Authority, better known by its abbreviation BaFin, suggest
authorities are doing their best to avoid drawing attention to Germany’s
enabling the financing of Iran’s nuclear program, and simply want to
A spokesman for BaFin said on Monday the agency knew of no
violations of UN sanctions and therefore had no reason to ban EIH
Michael Offer, a spokesman for the Finance Ministry, said: “I can
say that, so far, the bank oversight authority has no information about
violations... but that BaFin and the Bundesbank are investigating all of
The current German-Iran bank scandal recalls the revelation
in 2008 that the German Federal Office of Economics and Export Control
the green light to a €100 million-plus deal that permitted the Siegen,
Rhine-Westphalia-based engineering firm Steiner Prematechnik Gastec to
Iran three plants for converting natural gas to liquid fuel, at a time
then-British prime minister Gordon Brown and then-US president George W.
sought to clamp down on Iran’s liquefied natural gas sector.
As with the
EIH Bank, the foreign press (in this case, The Associated Press and The
) blew the whistle on the gas deal, prompting an
Chancellor Angela Merkel to utter words of disapproval about her
Nonetheless, her administration did not block the deal and she
implemented what amounted to a paper tiger “discouragement” policy to
trade with Iran. German companies ignored the nonbinding policy and,
predictably, trade with the Islamic Republic increased in 2009.
forward to July 2010 and the latest exposure of Germany hosting Iranian
with ties to terrorism as well as the illegal nuclear weapons program.
Germany, once again, employ smoke and mirror tactics to placate the
States, France and the United Kingdom, as well as its “special
ally Israel? Or will Berlin seize the opportunity to make a clean break
jingoistic regime that mocks Germany and its partners as “idiots” – as a
President Mahmoud Ahmadinejad said on Monday? The Iranian despot also
articulated his determination to proceed with the country’s nuclear
Rewind again to 2008, when the EU banned Bank Melli Iran (also
called the National Bank of Iran). While Germany agreed to the
Bank Melli, the grand coalition of Social Democrats and Merkel’s
impeded pulling the plug on Bank Saderat Iran (The Export Bank of Iran),
has offices in Hamburg and Frankfurt, and Bank Sepah in Frankfurt. Bank
transactions were thus easily switched to branches of other Iranian
banks in the
Federal Republic. The Iranian shell game – with a wink of approval from
German authorities – continued in the financial sector.
Stuart A. Levey,
the American Treasury’s under secretary for terrorism and financial
intelligence, in an whirlwind tour of Germany’s financial institutions
was able to twist the arms of recalcitrant institutions such as Deutsche
Commerzbank and Dresdner Bank (which was subsequently acquired by
to pull out of the Iran business rather than face an economic beating in
United States. Much to the disappointment of those urging Berlin to
take the high road and end its alliance with Teheran, it took outside
to alter Germany’s behavior.
After years of deceptive Iranian financial
practices, will Germany now recognize that pressure from a unified
complement the robust US sanctions and ratchet up the pressure on the
After seven years of futile EU diplomacy with Iran, coupled with meek EU
sanctions, persona non grata status is warranted for Iranian financial
institutions operating in the heart of Central Europe. The US Treasury
trade with EIH Bank, Bank Sepah and Bank Saderat because of their
terrorism and nuclear proliferation.
Germany’s foreign policy reeks of
security shortsightedness and narrow economic interests. EIH and the
banks are a conduit for propping up the Iranian regime and financing
jingoistic foreign policy against the West.
If Germany were to flex its
economic muscle it could play a central role in isolating the Islamic
Merkel has a vital opportunity to join the ranks of fellow EU countries
United States in turning the economic screws on Iran, and to show the
international community that Iran’s renegade behavior will not be