Deutsche Bank may have violated Iran sanctions

German financial giant reportedly confirms US investigation against it over financial transactions in US dollars with Tehran.

Deutsche Bank headquarters in Frankfurt 370 (R) (photo credit: Ralph Orlowski / Reuters)
Deutsche Bank headquarters in Frankfurt 370 (R)
(photo credit: Ralph Orlowski / Reuters)
BERLIN – Flagship German financial institution Deutsche Bank appears to be embroiled in violations of Iran sanctions, the German television channel n-tv reported Tuesday on its website.
According to the report, Deutsche Bank confirmed in its quarterly business report on Tuesday that US investigators were probing the banking giant for violating the trade embargo on Iran.
The possible violation deals with a financial transaction with the Islamic Republic in US dollars. Deutsche Bank says it will now cooperate with the authorities, though it had previously refused to comment on the allegations.
In August, The New York Times reported that the US authorities had launched investigations into international credit organizations for their involvement in bank deals totaling billions of dollars with Iran and Sudan.
Germany’s bank system has been plagued at times by Iranian financial scandals. Last year, the German business daily The Handelsblatt reported that the country’s Foreign Ministry and Central Bank (Deutsche Bundesbank) had engaged in a complex, sanctions-busting transaction with the Europäisch-Iranische Handelsbank (EIH). The EIH, an Iranian bank that the US says helped finance Tehran’s nuclear proliferation efforts and alleged missile program, was placed on the EU’s terror list after the scandal surfaced.
According to that report, the German Foreign Ministry green-lighted a 1.5 billion-euro oil payment from India to be transferred to Tehran via the EIH. The US Treasury Department issued a sharp rebuke to the German government for facilitating trade with Iran.
The Handelsblatt reported at the time that “although [Iranian] President Mahmoud Ahmadinejad’s country is subject to strict economic sanctions by the EU and USA, Germany helps in circumventing them.”
Germany is on course to reach a nearly 4 billion- euro bilateral trade volume with Iran in 2012. Last year, the total bilateral trade numbers showed nearly 4 billion euros worth of trade with Tehran. Israeli, American, British and French officials have expressed frustration with Germany’s failure to rope in its flourishing trade relations with the Islamic Republic.
According to WikiLeaks documents, Chancellor Angela Merkel’s administration refused for years to impose sanctions on the EIH because “the German business community is very powerful.”