Out of consideration for US laws, German banks hold back on the financing of lucrative trade with Iran despite the federal government’s push to expand trade with the Islamic Republic, a German newspaper said. Other European countries have also tried to encourage their banks to do business with Iran - so far without success.
According to a report by Deutsche-Wirtschafts-Nachrichten on Monday, the federal government wants to make sure that German banks engage more strongly in Iran business. “We are in contact with the German banks to seek to ensure that there can be a possible boom in German-Iranian financial relations,” said a spokeswoman for the Federal Ministry of Economics in Berlin on Monday.
Due to past penalties for violating Iran sanctions the European banks, because of remaining US sanctions, shun business with the country. This is while the EU lifted its sanctions against the country following the nuclear agreement a year ago. But German banks fear like Swiss financial institutions to run afoul of US laws, because the US government has not yet removed all the sanctions.
The German Foreign Ministry also acknowledged problems in the US. “The German, the British and the French governments have repeatedly held talks, repeatedly expressing that the German and European policy sees no obstacles and barriers for the involvement of European banks in the financing of trade - or investment deals with Iran, “said a ministry spokesman.
In May, the German Federal Statistical Office had announced an increase in German exports to Iran by 7% in the first quarter.
