The adventure of German banks in Iran is threatened by sanctions
Several German banks have been dealing with Iran over the past years, capitalizing on a breakthrough on Tehran’s nuclear program, but the adventure may falter amid US threats to resurrect sanctions.
Washington has given foreign companies until early November to stop its dealings with Iran, saluting unprecedented sanctions. The shift in the US position toward Iran’s nuclear program is particularly reflected in Germany, which has invested heavily since 2015 to restore economic relations with the Islamic Republic.
The two biggest banks, Deutsche Bank and Commerzbank, were cautious and remained out of the game after Washington imposed tough sanctions in 2015 on charges of violating the ban on Iran.
In contrast, some small German banks saw opportunities in Iran to develop their businesses, including the International Efficiency Center, which was founded in 2008 and includes six cooperative funds in Tüttingen, Baden-Wuerttemberg, to help clients in sensitive markets such as Iran and Sudan.
Germany has recorded an increase in its trade with Iran since the signing of the agreement on the nuclear file in 2015, bringing the value of exports of goods to this country 2.57 billion euros in 2016 (up 22 percent from the previous year) and 2.97 billion euros last year (up 5.15 percent from 2016) .
“Despite US threats, we will continue to serve our customers,” Patricia Malfi, international business director at the center, told AFP. “We have to wait to see what future sanctions will be before any decision is taken,” she said. The institute does not intend to capitulate after the request, according to the official, “has increased significantly in recent years, from companies listed in the DAX index (for the top 30 German companies) and from all over Germany, as well as from Switzerland.”
However, dealing with Iran is more cautious. The financing operations are conducted only in euros. The center does not deal with companies that have American or permanent residence in the United States, and the proportion of US-made items in products exported to Iran should not exceed 10 percent.
“The circumstances forced our management to be brave,” Melfi stressed. Deutsche Bank, which serves as a central bank for more than 1,000 local cooperative funds in Frankfurt, has opted to withdraw entirely from Iran. “Our administration has decided to stop all payment services with Iran,” a spokesman said.
The International Competency Center intends to rely on another financial partner, the German branch of the Iranian national bank Melli, based in Hamburg, but it may not be able to do so if Iran’s largest commercial bank is listed on the US list of banned companies, the past.
The activities with Iran for about 390 German savings funds require the release of documents dealing with export contracts. A source close to the file said, “We will consider the issue with more attention.”
Another crossing to deal with Iran is through the European European Commercial Bank, a German bank in Hamburg that has been specializing since 1971 in dealing with the Islamic Republic. The bank confirmed on its website that it remains “in full disposition” to serve its customers.
The German Bundesbank, which is authorized to intervene in the event that the European Union imposed financial sanctions, believes that the situation has not seen any change. “Only the EU sanctions regime (on Iran) will be decisive,” he said, adding that “nothing has changed until further notice.”
If a ceiling for remittances to Iran is re-imposed before January 2016, then the Bundesbank must agree to any payments involving an Iranian partner. The lobby of German banks, Credit Verchavt, calls on Berlin and its European partners to be clear so that banks and companies are “effectively protected from any possible US sanctions.”
“Many companies want to stop any dealings with Iran because they can not assess the risks of staying there,” Melfi said. Source