Germany probes huge Iran cash transfer request

German authorities have started investigating an Iranian government plan to fly out hundreds of millions of euros from Hamburg to Tehran. German lawmakers have accused the US of "improperly exerting pressure" on Berlin.

The €300 million ($350 million) in question is being held by the European-Iranian Trade Bank, which is majority-owned by Iranian state-owned banks, but registered in Hamburg with the Bundesbank, Germany's central bank.

Business | 20.05.2018

Iran wants to fly the money out as soon as possible to avoid the potential freezing of accounts as a result of reimposed US sanctions coming into effect in August, reported Berlin-based Bild newspaper on Tuesday.

If the operation goes ahead, it is likely to trigger a strong response from Washington. The US ambassador to Germany, Richard Grenell, told the newspaper that the government of US President Donald Trump was "very concerned" and called on Berlin "to intervene and stop the plan."

The money would be passed on to Iranians lacking a valid credit card to use while traveling abroad and in need of cash, Bild reported. Under impending US sanctions, Iranian banks will be excluded from the main credit card networks, including VISA and Mastercard, making it difficult for Iranians traveling outside the country.

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EU unites against Trump over US sanctions on Iran

Tough decision ahead

A German Finance Ministry spokeswoman said it would be one of the largest cash transfers ever in German history.

The probe is looking at whether the arrangement would be an infringement of existing sanctions, and that in order for authorities to intervene, there would have to be concrete evidence of illegal activity, according to the German Foreign Ministry.

Read more: Germany reaffirms Iran nuclear but business worries abound

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German lawmaker Bijan Djir-Sarai, an Iranian-German immigrant who serves as foreign policy speaker for business-friendly opposition Free Democrat Party, called on the government to do everything in its power to block the transfer if there is any evidence that the money could be used to finance terrorist activities.

'Improperly exerting pressure'

Omid Nouripour from the environmentalist Greens told DW that "the Iranians are trying to act before US sanctions come into effect — sanctions that we Europeans don't approve of as Iran has so far adhered to the nuclear deal."

Rolf Mützenich from the center-left SPD criticized the US ambassador for his early comments on the planned money transfer.

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Read more: Iran nuclear deal: Germany's special role and plans

"Ambassador Grenell is improperly exerting pressure on the German government again in demanding immediate steps to be taken," he told DW. "The ambassador should finally realize that German authorities will act in line with the laws in place."

Germany is in a bind over the requested transfer because blocking the move could be politically precarious, as it could mean the collapse of the Iran nuclear deal, which the European Union still hopes to salvage.

Politics

The deal breaker

President Donald Trump announced on May 8 that he was pulling the United States out of the 2015 Iran nuclear deal, arguing that the international accord was not in America's "national interest." The decision threw a cloud of uncertainty over the future of the nuclear accord and raised tensions with US allies in Europe.

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Slap in the face

Britain, France and Germany lobbied the Trump administration and Congress to remain in the nuclear accord, arguing that the deal was working and a US violation without a follow up plan would be destabilizing. In European capitals, the Trump administration's withdrawal was viewed as a slap in the face of allies.

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A triumph of diplomacy

The Joint Comprehensive Plan of Action (JCPOA), better known as the Iran nuclear deal, was signed in 2015 by United States, China, Russia, France, Germany and Britain (P5+1) and Iran following years of negotiations. Under the international agreement, Iran agreed to dismantle its nuclear program and be subject to monitoring in exchange for the lifting on international nuclear related sanctions.

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Compliance and verification

The JCPOA includes a robust monitoring, verification and inspection regime carried out by International Atomic Energy Agency (IAEA). The UN watch dog has verified Iran's compliance with the deal in 12 quarterly reports. The JCPOA allows Iran to pursue a peaceful nuclear program for commercial, medical and industrial purposes in line with international non-proliferation standards.

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Obama's achievement

The Iran nuclear deal was President Barack Obama's signature foreign policy achievement. Seeking to undo nearly every Obama administration legacy, Trump came into office calling it the "worst deal ever." The Trump administration argues the nuclear deal doesn't address other unrelated issues such as Iran's ballistic missiles, regional influence, support for "terrorist" groups and human rights.

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Iranians approved

The nuclear deal and lifting of punishing nuclear related international sanctions created optimism in Iran after years of economic isolation. However, even before Trump pulled the US out of the deal, Tehran blamed the US for holding back international investment and not fulfilling its end of the bargain due to the uncertainty created by Trump's threats.

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The opponents

After eight years with Barack Obama, Israeli Prime Minister Benjamin Netanyahu found the US president he wanted in Donald Trump. The Israeli leader repeatedly slammed the deal despite his own military and intelligence chiefs' assessment the that JCPOA, while not perfect, was working and should be maintained. Saudi Arabia and the UAE are the other main opponents of the nuclear deal.

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Who's left?

The EU-3 (Britain, France, Germany) are scrambling to ensure that Iran receives the economic benefits it was promised in order to avoid Tehran pulling out of the deal. As EU businesses face retaliation from the US for doing business with Iran, many are opting to avoid Iran. This would likely be a present to Chinese and Russian businesses.

hg/jd (Reuters, dpa)