Iran uses small bank in Germany to beat sanctions

July 19, 2010

, WASHINGTON, Jul 19 – A small Iranian-owned bank in Germany has been used by the Iranian government to go around international economic sanctions and do business on behalf of blacklisted organizations, The Wall Street Journal reported late Sunday.

Citing unnamed Western officials, the newspaper said the bank in question is the European-Iranian Trade Bank AG (EIH).

According to the report, the financial institution has done over a billion dollars of business for Iranian companies associated with Iran\’s military and ballistic missile procurement programs, including companies sanctioned by the United States, the United Nations and the European Union.

The UN Security Council slapped a fourth set of sanctions against Iran in June for refusing to halt its uranium enrichment work, the most sensitive part of Tehran\’s controversial atomic drive.

The new UN measures authorize states to conduct high-seas inspections of vessels believed to be ferrying banned items to Iran and add 40 entities to a list of people and groups subject to travel restrictions and financial sanctions.

Meanwhile, the US administration added Iranian individuals and firms to a blacklist as part of US and European efforts to tighten the screws on Iran.

The new US sanctions target insurance companies, oil firms and shipping lines linked to Iran\’s nuclear or missile programmes as well as the Islamic Revolutionary Guards Corps (IRGC) and Iran\’s defense minister Ahmad Vahidi.

The Journal said that EIH\’s business partners include units of Iran\’s Defense Industries Organization, the Aerospace Industries Organization and the Iranian Revolutionary Guard Corps.

These companies are believed to be involved in the development of Iran\’s nuclear and missile programs.

In 2009, EIH appears to have been involved in a broad sanctions-evasion scheme, conducting transactions on behalf of Iran\’s Bank Sepah that has been sanctioned by the United Nations, Europe and the United States for facilitating Iran\’s weapons trade and proliferation activities, the paper said.

EIH was founded by a group of Iranian merchants in Hamburg in 1971, according to The Journal. It operates openly under the supervision of German bank regulators, but the US Department of Treasury blacklisted it for alleged illicit business with Iran, the report noted.


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