No Restrictions on Bank Sepah’s German Operations

Bank Sepah, the oldest Iranian bank, has denied reports in the local media that its Frankfurt branch has been subject to a new round of sanctions, saying foreign exchange operations of the branch remain unhindered.

“The relationship of Bank Sepah with Germany is expanding as agreed upon with the banking officials of Germany. On Friday alone, more than €52 million worth of foreign exchange transactions were conducted in the Frankfurt branch of the bank,” reads a statement by the bank’s head of International Affairs Department published on its official website.

“The Frankfurt branch of Bank Sepah has so far provided more than $607 million worth of a variety of credit and foreign exchange services in Germany,” Amir Hosseini added.

The branch is connected to TARGET2, the real-time gross settlement system for the Eurozone, as well as SEPA, the payment integration initiative of the European Union.

The bank also has operational branches in other European cities, namely Paris, Rome and London.

In recent days, the Jerusalem Post, an Israeli newspaper, had reported that BaFin, Germany’s Federal Financial Supervisory Authority, has subjected the branch to a credit limitation. This led a number of local media to misconstrue the report.

According to the official BaFin statement published on Nov. 14, the supervisory authority “issued an order to Bank Sepah-Iran, Frankfurt Branch, prohibiting the institution from lending until further notice” on Sept. 12.

“BaFin had identified contraventions of requirements for a proper business organization within the meaning of section 25a (1) of the Banking Act (Kreditwesengesetz–KWG),” it adds.

Section 25a of the aforementioned act is subtitled “particular organizational duties, authority to issue orders” and deals with the establishment of proper business organization as well as the responsibilities of the management board among other things.