German banks are increasingly refusing to accept payments from Iranian banks, apparently more scared of the US than of the EU. As a result, some German small and mid-sized exporters face possible bankruptcy. “Eighty to 85 percent of all payments to German banks are being rejected,” said Helmut Gottlieb, director of the Hamburg branch of Bank Melli Iran.
According to Mr. Gottlieb, the refusal to process payments breaches the rules of both the Bundesbank and of Europe’s Single Euro Payments Area (SEPA) system. Germany’s central bank has a duty to uphold the payments system in Germany and to guarantee the contractual obligations of all European banks to carry out SEPA bank transfers, he continued.
Not so, said the Bundesbank, arguing it is not responsible for implementing SEPA rules and that it can’t force banks to accept payments. The German government, meanwhile, was decidedly evasive in its response to Handelsblatt inquiries. Asked for comment, the finance ministry said the matter was up to the economics ministry and the Bundesbank. The economics ministry then declined to comment.
The US ambassador to Berlin, Richard Grenell, welcomed the banks’ refusal to handle transfers, telling Handelsblatt that German comapnies are increasingly adhering to US sanctions against Iran. Meanwhile, Tehran said it would pull out of the nuclear deal unless its foreign trade remains intact. That’s unlikely to happen if banks don’t play ball.
t week, Foreign Minister Heiko Mass reiterated Germany’s determination to salvage the deal together with the EU, Russia and China.
“To keep the agreement alive, we need concrete solutions so that payment routes are kept open and trade with Iran remains possible,” Mr. Maas said during a meeting about Iran on the sidelines of the UN General Assembly in New York.
He didn’t mention that payments are already being blocked by German banks, meaning money transferred for exports aren’t making it from Iran to German firms’ bank accounts. Companies worst affected do not want to go on the record, fearing more harm to their businesses. Some companies based in Germany that have Iranian shareholders even said they can’t pay their employees’ wages anymore.
DZ Bank, regional bank Helaba and Deutsche Bank joined other major banks in stopping payments to and from Iran some time ago. Only 40 to 50 of Germany’s 900 cooperative banks and scores of Austrian banks are still processing payments linked to Iranian deals.
Iran-related payments are a sensitive topic: Banks face major fines if they contravene US sanctions. Commerzbank paid $1.5 billion in 2015 for forbidden Iran deals and French bank BNP Paribas paid $9 billion. That’s why banks are so afraid of the US. They could even be locked out of all dollar transactions, which could put them out of business.
