EIH Bank 311.
(photo credit: REUTERS)
BERLIN – The European Union on Tuesday issued an updated list of sanctioned
Iranian companies involved in Tehran’s nuclear program, including the
Hamburg-based Europäisch- Iranische Handelsbank (EIH).
Since at least
2008, the Merkel administration had vehemently opposed the closure of
What prompted the German government to shutter a main financial
conduit for German businesses and Iran’s economy?
According to the EU statement,
“EIH has played a key role in assisting a number of Iranian banks with
alternative options for completing transactions disrupted by EU sanctions
EU foreign policy chief Catherine Ashton signed the
19-page order, which was reviewed on Tuesday by The Jerusalem Post.
"In 2009, EIH was used by [the Deutsche] Postbank in a sanctions evasion
scheme which involved handling transactions on behalf of UN-designated
Bank Sepah. EU-designated Bank Mellat is one of EIH’s parent banks,"
according to the EU sanctions list. (Both Bank Sepah and Bank Mellat are
based in Tehran.) The Merkel administration had consistently
ignored warnings from the French, American and British governments about EIH’s
nuclear and military activities. Last year, the US Treasury Department
sanctioned EIH because it had served to advance Iran’s nuclear and rocket
The International Herald Tribune
reported last summer that
Chancellor Angela Merkel snubbed President Barack Obama’s request to close
According to a WikiLeaks cable from 2008, Will Gelling, the head of
the British Foreign Office’s Iran Coordination Group, said the UK “is pushing
Germany on this bank with a view to an EU listing,” but “Germans are pushing
A second 2008 British WikiLeaks dispatch conveys the frustration
of trying to rope Berlin into a robust sanctions strategy against Iran: German
agreement on anything meaningful will be “pulling teeth,” reads the
The French tried to place the EIH on the sanctions list in
February, but the Germans squashed the proposal.
The UK’s efforts to
twist Germany’s arms to shut down the EIH’s operation have hardly been reported.
The Anglo- American analysis, and the French efforts against the dangers of the
so-called terror bank EIH, were well ahead of the security curve. It appears
that the Merkel administration prioritized short-term profits for German firms
(total trade with Iran exceeded 4 billion euros in 2010) over long-term global
Nonetheless, the new decision to ban EIH, largely because of
its strategic importance for Iran’s drive to go nuclear, might very well be the
crowning achievement of this EU sanctions round.
The converging American,
French and British pressure, particularly from the US Treasury’s terror
financing unit, prevailed over Berlin’s desire to protect mid-size German firms
– the main EIH customers – at the expense of international
Stuart Levey, the US Treasury’s former assistant secretary for
terrorist financing, and his successor David S.
Cohen, as well as the
staff of the department working to counter terror financing, put a laser-like
focus on pulling the plug on the EIH operation in Europe. All of this helps to
explain why the Americans wore down Berlin, which was beginning to panic about
the damage to Germany’s post- World War II reputation, as well as the possible
loss of access to American markets and financial institutions.
Obama will present Merkel with the Presidential Medal of Freedom, America’s
highest civilian award. One wonders if the chancellor also wanted to avoid more
lousy press reports about her government protecting the so-called Iran terror