German bank holds account for to-be-sanctioned Iran Air
The Jerusalem Post can reveal that the German bank Varengold in the city of Hamburg conducts business with Iran Air – an airline that will be sanctioned by the US government on November 4 – and the Liechtenstein-based Union Bank is also involved in commerce with the Islamic Republic of Iran.
A highly reliable source confirmed the business of the two European banks with Iran. The source’s information was buttressed by Iran Air’s website, revealing the bank account data for Varengold. Iran Air Deutschland (Germany) lists on its website account information for transfers to Varengold.
Iran Air has been accused of aiding Syrian dictator Bashar Assad in his war against Syrian opposition groups. The new round of US sanctions on Iran’s bank, airline and energy sectors will be imposed on November 4, creating legal and financial exposure among companies in Germany and across Europe which could face US economic penalties for doing business with Iran.
Post press email queries to Varengold Bank, Union Bank and Iran Air’s Frankfurt office were not immediately returned.
Major German and European banks are staying away from Iran’s market because they fear US sanctions. In a May 2018 Atlantic magazine article titled “How Iran Can Evade Sanctions This Time,” Liechtenstein was mentioned as a country where “Iran used a shifting network of front companies” to conduct business.
European banks tend to avoid publicizing their business deals with Iran, because of possible reputational damage to their financial institutions. The US State Department classified Iran as the top international state sponsor of terrorism. The German business daily Handelsblatt reported on Friday that the Association of German Banks wrote in a policy paper that “Iran business is and remains risky for banks.”
German bank executives who sit on the board of SWIFT, the cross-border financial transaction agency in Brussels, will likely be confronted with additional US sanctions exposure next month. Stephan Muller, the SWIFT board member from Commerzbank, and Christian Westerhaus, the SWIFT board member from Deutsche Bank, will decide along with other board members whether to sever Iran from the SWIFT system.
In August, 16 Republican US senators urged Treasury Secretary Steven Mnuchin to “impose maximum pressure on Iran.” The senators’ letter was led by Sen. Ted Cruz from Texas. “We urge you to take all necessary steps to ensure the Society for Worldwide Interbank Financial Telecommunication (SWIFT) disconnects the Central Bank of Iran and all other designated Iranian financial institutions,” wrote the politicians.
In 2015 Deutsche Bank paid $258 million to US authorities for violations of Iran sanctions between 1999 and 2006. Commerzbank paid $1.45 billion in penalties to US government authorities for violations of Iran sanctions.
Germany remains Iran’s largest European trade partner. German Chancellor Angela Merkel provides state credit insurance guarantees for businesses that wish to operate in Iran.
In contrast to Germany’s largely pro-Iran foreign and trade policy, US Ambassador to Germany Richard Grenell urged German authorities in June to pull the plug on landing rights and airspace usage for the US-sanctioned Iranian Mahan Air.
Grenell said: “Here in Germany, I have asked the German government to support our efforts to stop an airline called Mahan Air from utilizing German airspace and airports. We know that Mahan Air has been used by the Iranian Revolutionary Guard Corps as a mode of transport for weapons, resources and fighters, so we’re asking our allies to help us put a stop to it.”
In a forthcoming report from the Foundation for Defense of Democracies on the risks German companies face when conducting business in Iran, FDD noted that members of the Fatemiyoun, an Afghan militia created and controlled by the IRGC, can be seen onboard an Iran Air flight to Damascus in an undated photograph published in 2017. The report from the nonpartisan national security think tank cited the frequent Iran Air flights between Damascus and Tehran, although “The Iran Air website does not even include Damascus among its destinations from Tehran, where the flights originate.”
The US Department of Treasury sanctioned Iran Air in 2011 for “providing material support and services to the Islamic Revolutionary Guard Corps and Ministry of Defense and Armed Forces Logistics.”
The Trump administration designated the IRGC a terrorist organization in 2017. As a result of the Iran deal in 2015, the US delisted Iran Air in 2016 from its sanctions list.
Iran Air uses airports in the German cities of Cologne, Frankfurt and Hamburg for passenger and cargo flights. In a UN resolution from 2010, Iran Air was cited as a company that was possibly involved in sanctions evasion.