German bank funding Iran nuke program

Berlin: Efforts to up implementation of UN sanctions under way.

July 19, 2010 12:04
3 minute read.
Brazilian Ambassador to the UN Maria Ribeiro Viott

UNSC vote on Iran sanctions. (photo credit: Associated Press)


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BERLIN – German authorities are facing criticism because of the role of a Hamburg-based Iranian bank in financing Teheran’s nuclear and missile development programs. Europäisch-Iranische Handelsbank (EIH) specializes in financing trade between Europe and Iran and has been blacklisted by the US government.

The Jerusalem Post has learned that Western diplomats have criticized Germany for failing to join the UK and France in their push to clamp down on EIH as part of wider sanctions against Iran. When asked about the criticism, a spokesman for the German Foreign Ministry told the Post last week that the the federal government was “working with its European partners on an intensified implementation of the recent UN Security Council resolution against Iran.” The spokesman added that efforts also included “continued restrictions in the bank sector.”

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Over the years, security experts have criticized German bank and export controls in connection with Iran’s nuclear program and military proliferation.

After being asked about EIH and whether Germany was seeking to exempt it from sanctions, Tobias Pierlings, spokesman for the German Economics Ministry, wrote in an e-mail to the Post that all aspects of “additional EU sanctions are being examined. The consultations are proceeding in a confidential setting and are not yet final.”

Michael Offer, a spokesman for the Finance Ministry, said Monday that German financial officials had no knowledge of wrongdoing by EIH following a Wall Street Journal report that, while referring to it as the European- Iranian Trade Bank AG, said it had conducted more than a billion dollars in international business for Iranian companies.

“I can say that so far the bank oversight authority has no information about violations,” Offer said, adding that the allegations were being investigated by the relevant bodies, including the Bundesbank.

A spokeswoman for EIH refused to comment on the report but said the bank would release a statement later Monday.

EIH’s Web site says the bank was founded in 1971 and describes it as “a specialized bank for services and business possibilities with Iran.” But the US Department of the Treasury in June included it on a list of individuals and institutions it said were helping Iran develop its nuclear and missile programs and evade international sanctions.

EU foreign ministers are to meet later this month to finalize their own lists of firms facilitating business with Iran. Currently, the EU has not named the bank on any of its blacklists.

Iran vehemently denies that its nuclear program is intended for anything other than peaceful purposes such as energy-generation, and insists it has the right to enrich uranium under the international nonproliferation treaty.

EIH has conducted business on behalf of the Iranian Revolutionary Guard Corps, which controls major business interests in Iran, as well as for units of Iran’s Defense Industries Organization and Aerospace Industries Organization, Western officials told the Wall Street Journal. German banking officials have allowed EIH to continue operating because it was not listed in the sanctions passed in UN Security Council resolutions.

The Iranian government has reportedly doubled its investments in EIH since 2007.

Numerous international corporations have begun changing their business operations to comply with Iran sanction legislation passed in the US. For example, the French energy trader Total announced it had suspended all sales of gasoline and refined petroleum products to Iran, while Spain’s Repsol backed out of a contract to develop part of an Iranian natural gas field. British Petroleum announced it would stop providing fuel for Iranian aircraft, as jet fuel qualifies as refined petroleum. In addition, Royal Dutch Shell reportedly will not renew its contracts to supply Iran Air with aviation fuel. The company ceased providing gasoline to Iran in March.

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