BERLIN (Reuters) - Germany’s financial market watchdog is investigating a newspaper report alleging that an Iranian-owned bank in Germany is helping the Islamic Republic do business linked to its nuclear program, the government said on Monday.
According to the Wall Street Journal, the European-Iranian Trade Bank AG — called EIH Bank in Germany — has done more than 1 billion dollars’ worth of business for Iranian firms, including some blacklisted by the United Nations, the United States and the European Union.
Citing Western officials, the newspaper said EIH “appears to have been involved” in a broad sanctions-evasion scheme, doing deals for Iran’s state-run Bank Sepah, which is under international sanctions for aiding Iran’s sensitive nuclear work.
EIH said it was observing the relevant rules and was regularly audited by German supervisory authorities.
“(The bank) strictly fulfils all prevailing mandatory legal rules and export regulations, (and also) obeys all sanction regulations applying in the Federal Republic of Germany and the European Community,” it said in a statement.
Germany’s Finance Ministry said the central bank and financial market watchdog BaFin were investigating the matter.
“The banking oversight currently has no findings about the infringements reported, but BaFin and the Bundesbank are investigating these accusations against this bank,” ministry spokesman Michael Offer told a news conference.
The U.N. has imposed a range of sanctions on Iran over its uranium enrichment program, which Western powers believe aims to create atomic weapons. Tehran says it wants nuclear power only for the peaceful generation of electricity.
The newspaper also said the U.S. Treasury had blacklisted EIH and that Washington was pushing the EU to follow suit.
Asked about this, German Foreign Ministry spokesman Andreas Peschke said Berlin and its European partners were working to implement the latest round of sanctions on Iran agreed by the U.N. Security Council in June.
“In this context we’re also looking at whether this implementation can be backed up with additional sanctions.
“Among these are further restrictions in the banking sector,” he said, adding discussions were still under way.
The latest round of U.N. sanctions calls for measures against new Iranian banks abroad if a connection to the nuclear or missile programs is suspected, as well as vigilance over transactions with any Iranian bank, including the central bank.
The U.S. Congress passed an additional round of sanctions later last month which go beyond the U.N. measures.
These state that foreign banks that do business with key Iranian banks or the Revolutionary Guards — cited by the newspaper as one beneficiary of EIH’s business dealings — will not be allowed access to the U.S. financial system.
Additional reporting by Edward Taylor; editing by Tim Pearce and Jon Loades-Carter