EIH Bank - "Nothing has changed!"

By Matthias Küntzel 

Recently, the International Atomic Energy Agency (IAEA) revealed for the first time detailed information about Iran’s atomic weapons research. It reported about studies regarding the mastery of the initial ignition of the atom bomb and publicized reports about the assembly of nuclear warheads on the Shahab-3 missile - a missile that is well-received at military parades in Teheran with the call "Destroy Israel!" Meanwhile, the production of enriched Uranium, which the computer virus Stuxnet had temporarily delayed, is now advancing: between February and May 2011, the supply increased from 3.6 to 4.1 tons – enough to build more atomic bombs. Although this issue currently makes no headlines in Germany, the Iranian bomb is a severe and highly-explosive danger. Whoever has it can commit unprecedented human rights violations at home and increase its aggression abroad: suddenly, nuclear terrorism would be a "real-politik" option. It is therefore no shock that many world governments gave a sigh of relief when the "European-Iranian Trade Bank" (Europäisch-Iranische Handelsbank, EIH-Bank) in Hamburg was placed on the EU Sanctions List on May 23, 2011. This bank is subject to German banking supervision, but belongs 100 percent to the Iranian regime.

As more and more area-wide banks cease doing business with Iran, the EIH-Bank is becoming even more critical for the power-holders in Teheran: it is used as a loophole to circumvent the international sanctions and to support the financing of the atomic weapons program.

Although the German Federal Government rejects Iranian nuclear weapons, it has defended the work of the EIH-Bank for years - and therefore places the economic interests of German corporations above peace in the Middle East. After all, according to information of the German-Iranian Chamber of Commerce in Hamburg, “the lion’s share of 3.8 million Euros of German exports to Iran has been handled through the EIH-Bank.”

Already in 2008, the EIH-Bank was an object of international political strife. London pressured the German Federal Government with the demand to sanction the bank. "Germans are pushing back," stated a report of a high British official, which was made public through Wikileaks. In 2009, France also called for sanctions, but likewise was stonewalled. In 2010, U.S. President Obama finally discussed this subject in a telephone conversation with the German Federal Chancellor: likewise in vain, as the New York Times reported. After hesitating, the German Federal Government finally gave in in April 2011. No longer did it want to “prevent the financial institution from landing on the black list in the forthcoming reviews of the European Union’s Iran sanctions,” it said now.

Until then, all the European neighbours’ attempts to sanction the EIH-Bank were denied by German veto. Why did the German Federal Government now yield? Was it the realization that Germany should strengthen the Iranian democratic movement rather than the barbaric regime? Had it come to recognize that the financial loopholes had to be closed, if it wanted to prevent the development of Iran’s atomic bombs through peaceful means? Unfortunately not. Because if that were true, then the authorities would do everything in their power today to sanction the EIH-Bank as consistently as possible.

In reality, the opposite is happening. In April 2011, the Foreign Office identified "clearly increasing evidence for... a growing role of the EIH-Bank in forbidden activities in Iran." Nevertheless, the Federal Bank as the responsible regulatory authority explained that after the sanctions decision, new regulations should not be made, "that the EIH-Bank may continue to carry out all its contractual obligations agreed upon before the sanctions decision."

Even further: As the EIH-Bank says in its opposition to the sanctions decision, it plans to maintain its normal commercial relations - even with Iranian banks, which have already been sanctioned because of their support for the atomic weapons program. In other words, even that which the sanctions decision has ceased will continue.

However, this requires the support of the Federal Bank - and that ultimately means the support of the Federal Government. Even though the funds of the EIH-Bank have been frozen since the Brussels decision, they may still be handled with the individual permits of the supervisory authorities. "Nothing has changed," EIH-Bank Manager Norbert Eisenmenger remarked to the Wall Street Journal. "The same departments of the Federal Bank that affirmed our transactions [in the past] will continue to endorse our transactions even under the sanctions."

Clearly, the German affirmation of the sanctions decision had very little to do with an internal realization and much to do with external pressure. This pressure strongly increased at the beginning of 2011. At that point, the Federal Government used the Federal Bank and the EIH-Bank for forwarding of billions of Indian currency to Teheran - a volatile cooperation of the German and Iranian state banks, which nevertheless did not earn much coverage in the German media. When this mammoth deal was publicized in April 2011, Germany, already isolated because of its Libya policy, stood at the focus on international criticism. So, the government swung its position - for image reasons, not for conviction.

But the time bomb in Teheran is ticking. It is time for Germanys Iran policy to be discussed not merely in the international press, but rather in Germany itself. The sanctions decision against the EIH-Bank still remains only on paper. The Parliament and the German public should ensure that the bank oversight of this puppet of the Iranian regime finally ends.