The EIH Bank - The German business relations must be based on human rights standards

by Daniel Holler, ISHR/IGFM

The European-Iranian Trade Bank AG (German: Europäisch-Iranische Handelsbank, EIHB), which was founded in 1971 as the German-Iranian Trade Bank AG, continues to thrive in the heart of Hamburg. According to the information of the International Society for Human Rights (ISHR/IGFM), the bank is one of the most significant monetary supporters of the Iranian regime.

This global actor so important to the Ahmadinejad government is a German bank with exclusively Iranian owners. It is financed by four shareholders. The Iranian Bank of Industry and Mining holds 52 percent; the remaining 48 percent is divided among the Mellat, Tejarat and Refah Banks - all three of which are under state control.

Additionally, the Mellat and Refah Banks are on the EU sanctions list and are led by high-ranking Iranian functionaries, whose names can also be found on the sanctions list. Through the EIHB, financial transitions necessary for the Iranian nuclear program have been and continue to be handled. The ISHR has evidence demonstrating that, since 2003, Bank Mellat has made possible transactions in the sums of hundreds of millions of dollars for the Iranian nuclear, rockets and armaments industries. The EIHB participated directly in many of these deals.

The bank Mellat holds 26 percent of the EIHB and is listed in the EU list (961/2010). The ISHR/IGFM holds the opinion that this should have been already more than enough to let the German federal government change its mind and to act strictly to sanction this bank and limit its commercial possibilities. The statements and the actions taken by the government are not sufficient. ISHR/IGFM-spokesman of the board Martin Lessenthin asks, "The German Federal Government claims to be strongly committed to human rights - but does this hold true also for the dealings with the EIHB?"

As long as there are many German entrepreneurs doing business with the Islamic Republic Iran, an Iranian bank remains stationed on German ground and the German Federal Reserve supports such a situation. The ISHR/IGFM cannot see "a practical desire to realize the commitment."

German companies are still doing big business with Iran

According to information by the ISHR/IGFM, global players, such Siemens and ThyssenKrupp, are withdrawing gradually from doing business with the Islamic Republic Iran. However, medium-sized companies in particular remain increasingly involved. Many entrepreneurs deal with "free", or non-sanctioned, products. Nevertheless, it is important to consider that even a "free" product like a construction crane is often used for public executions within the Islamic Republic.

According to human rights activists within the periphery of the ISHR/IGFM, it is practically impossible to do business in Iran without involving oneself with the infamous Pasdaran, which are listed on the US list of terror organizations and on the EU list of sanctioned entities. These revolutionary guards are the biggest entrepreneurs of the whole country. They are involved in nearly all sectors, but mainly in the field of energy production.

Various well-known German companies are involved in commercial activities in Iran. Among those are Babcock Borsig Service GmbH, Deutz AG, Festo AF & Co (with a Farsi Website www.festo.ir), KSB AG, Lenze AG (with a Farsi website www.lenze.ir), MultiMetall Reiner Schulze e.K. (with a Farsi website), Schaeffler KG, SWF Krantechnik GmbH, ZF Friedrichshafen, and several others.

Many well-known representatives of German industry were present at the April 2011 Tehran trade show, "Iran Oil Show 2011." Those include, among others, Pfeiffer Chemie-Armaturenbau GmbH, Leusch GmbH, Leoni - Kerpen GmbH, Erndtebrüker Eisenwerk GmbH & Co. KG, and LESER GmbH & Co. KG. Because the EIHB is being used for arranging financial transactions with the Islamic Republic Iran, it remains a very important partner for the German business world. Without this partnership, the financial flows would be strictly limited and therefore highly complicated.

Economic interest more important than human rights?

There are a great number of sanctions against the Islamic Republic Iran, such as the massive restrictions on international payments and currency exchange. Yet, until recently Germany did support this bank and thereby the terror regime in Iran.

Iranian dissidents close to the ISHR/IGFM continually confirm that the human rights record of Iran has steadily worsened, especially in the aftermath of the fraudulent presidential elections in 2009: protests are stifled violently; people are imprisoned and tortured arbitrarily. According the understanding of the ISHR/IGFM, Germany must emphasize its commitment to protection of human rights - if necessary, even with negligence of the country’s economic interests. However, the German hesitation and refusal to do so was only motivated by fiscal focus. This can be easily inferred from the statements of several representatives of the German economy, who noted that German companies may suffer from losses in the hundreds of millions due to the coming sanctions.

Giving in of the federal government - only partly a success

In August 2010 United States President Barack Obama hoped to achieve German measures against EIHB when he called the German chancellor to draw her attention to its connections to the Iranian terror regime. When Chancellor Merkel refused, American, Israeli and British diplomats arrived in Berlin, and the international pressure increased. The ISHR/IGFM participated as well: several press conferences and press releases were dedicated to the EIH Bank and the direct German business connection to the massive human rights abuses in Iran.

The first TV channel of Germany ARD broadcast a special report ("Report München") on April 18, 2011. The biggest German newspapers dedicated several issues to the subject. In particular, the planned transactions for the "Iran-India oil deal," supported by the German Federal Reserve, in February 2011 resulted in a big media echo - and an even bigger public outcry. Finally, the response from Berlin was given: should the European Union take the decision to list the bank for sanctions, the German government will not interfere. A semi-success has been achieved. Although the final reasons for such a decision remain unclear, experts assume that the Chancellor has yielded to the heavy international and national pressure.

The ISHR/IGFM urges the Federal Government to take a clear position for the human rights!

The ISHR/IGFM urges the federal government to take voluntarily a clear, reliable and sustainable position for the protection of human rights. In addition, it urges the German entrepreneurs to reconsider business activities with the Islamic Republic Iran - out of moral responsibility towards the Iranian people.

The spokesman of the board, Martin Lessenthin, clarifies, "Only with the active cooperation of all stakeholders, the Iranian terror regime, in Germany represented by the EIHB, can be brought down!" He adds, "This is the only way Germany can reclaim its position as a tough-minded defender of human rights."