Angela Merkel's government had been seeking to circumvent pending U.S.
sanctions; the sanctions have heaped pressure on Iranian President
Hassan Rouhani (left)
(Reuters)
The U.S. campaign to rein in Iran has scored a
victory in the German financial sector, after the Deutsche Bundesbank−
the country’s central bank− imposed a rule stopping a $400 million cash
delivery to Tehran.
Iran's cash-starved economy
desperately needs hard currency ahead of crippling U.S. bank sanctions
that will be introduced in November.
Germany allows the Iranian-owned European-Iranian trade
bank (EIH) to operate in Hamburg. The EIH holds more than $400 million
that Tehran wants to receive in cash ahead of a second wave of U.S.
sanctions due in November that impact banks and Iran’s energy sector.
The Deutsche Bundesbank has cooperated with the EIH in the past to
circumvent U.S. sanctions on Iran. The U.S. and the European Union
previously sanctioned the EIH for its role in advancing Iran’s nuclear
and missile programs. The sanctions on the EIH were lifted after the
world powers reached an agreement to curb Iran's nuclear program in
2015.
But President Trump effectively tore up the “decaying
and rotten” deal in May and vowed to impose greater sanctions on the
regime.
The disclosure in July that German Chancellor Angela
Merkel's government was seeking to circumvent the pending sanctions
triggered the U.S. ambassador to Germany to urge her government to stop
the massive payment transfer.
“We are grateful to our German partners for recognizing the need to act.
Iran’s malign activities throughout Europe are a
growing concern,” Richard Grenell, the U.S. ambassador to Berlin, told
FoxNews.com. Grenell, a former Fox News contributor, led the campaign to
persuade German authorities to prevent the cash transfer.
The U.S. embassy to Berlin tweeted: "Close partnership = results.
Thank you to our German counterparts for acting to stop Iran’s
activities."
The German central bank's new anti-Iran rule is slated to go into effect on August, 25.
Chancellor Merkel's efforts to send more than $400
million to the mullah regime echoes the Obama administration’s 2016
delivery of $1.7 billion in cash to Tehran, as part of a ransom to
secure the release of American hostages held by the Islamic Republic.
President Trump has repeatedly slammed his predecessor for sending the cash.
The United States government has classified the Islamic
Republic of Iran as a top state-sponsor of terrorism. The Merkel
administration is going to great lengths to promote trade with Tehran.
The German Economy Ministry said on Monday “export guarantees and
investment guarantees from the Federal Ministry of Economic Affairs are
still available to companies” that want to operate in Iran.
Germany's government provides 57 companies with more
than $1 billion in export and investment guarantees for their business
with Iran.
Major German multinational companies, however, are voting with their feet.
Automobile manufacturer Mercedes-Benz announced on
Tuesday that it had frozen all business with Iran due “to applicable
sanctions.” The first wave of U.S. sanctions kicked in on Tuesday and
will impact Iran’s automobile sector, as well as trade in precious
metals.
Sportswear giant Adidas meanwhile followed the lead of its U.S. competitor Nike and pulled the plug on its business with Iran.
Adidas said in a statement last week that it will not
extend commercial agreements with Iran's soccer association. Iran's
state- controlled media reported that Adidas withdrew from Iran's market
because it fears damage to its business in the U.S.
Peter Kohanloo, the president of the U.S.-based Iranian
American Majority organization, told FoxNews.com: “Germany, France and
the UK always talk about human rights and democracy, but by resisting
more sanctions, they’re actively opposing a growing revolution inside
Iran to replace one of the most egregious human rights violating
dictatorships in the world.
“Germany is making a huge mistake by
injecting much-needed cash into the mullahs’ resistance economy as they
murder Iranian protesters.”
In a joint statement on Monday, Federica Mogherini, the
EU’s foreign policy chief, and the foreign ministers of Britain, France
and Germany said: “We are determined to protect European economic
operators engaged in legitimate business with Iran.”
The EU implemented a “blocking statute” to insulate EU companies active in the Islamic Republic from American sanctions.
The Association of German Chambers of Commerce and
Industry said on its website that in the first five months of this year,
exports to Iran dropped by four percent.
Over the last few years, 120 German companies have opened offices in
Iran, according to the German industry group, but that trend is
sinking.
German exports to Iran climbed to $3.96 billion in 2017, up from $2.89 billion in 2016.
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