Germany acts against Hamburg-based Iranian bank

06 April 2011

A call by Dieter Graumann, the head of Germany's Jewish community, for the European Iranian Bank of Commerce in Hamburg to be shut down, has been echoed by the German government. Shortly after Graumann, the president of the Central Council of Jews in Germany, had made a statement to the ‘Handelsblatt’ newspaper, the government of Angela Merkel announced that no further payments from India for Iranian crude oil may go through the German banking system. "This bank should not be part of the world of German banking, it should be banned," Graumann had told the newspaper’s online edition.

Graumann's remarks followed revelations that India, under pressure from the United States to halt trade with Iran, planned to deposit billions of dollars in payments for Iranian crude oil in Bundesbank, Germany's central bank. The intention was for Bundesbank to transfer about US$ 12 billion annually to Iran via the Bank of Commerce in Hamburg. Now the German Finance Ministry said that no further Indian oil payments to Iran could be made through Germany, ‘Handelsblatt’ reported.

On Wednesday, the British newspaper ‘Financial Times’ reported that India had agreed to stop funnelling payments for Iranian oil through banks in Germany. The United States reportedly campaigned behind closed doors to end an arrangement it deemed in breach of UN sanctions intended to stop Iran’s nuclear program.

According to the German Ministry of Finance, Bundesbank must be notified of transactions involving Iran of more than € 10,000 (US$ 14,000), and it must give explicit approval to any transaction worth more than € 40,000, in keeping with EU sanctions imposed against Iran. The central bank had argued that it could not stop the deal because it had no relation to Iran's nuclear ambitions.