Bankenverband: US sanctions reduce German affairs in Iran

Because of US sanctions against the country, the business of German companies in Iran is shrinking more and more. "Iranian business is and remains risky for banks," said a statement from the banking association BdB.

Payment transactions with Iran are increasingly blocked: "All banks, with few exceptions, show restraint or cease their activities." In addition, the demand for financing of Iranian companies by companies is decreasing. German companies withdrew.

In the first eight months, Iranian exports fell to the German economy, according to official data, for just over four percent, to reach 1.8 billion euros. The fact that imports have also increased significantly is not significant because of their manageable volume of 336 million euros.

"Beginning of a downward spiral"

The president of the foreign trade association Holger Bingmann had already warned this week that recent losses in exports to Iran probably constituted "only a beginning of a downward spiral". The United States wanted to use their sanctions, which also punish German companies for violations, in order to prevent economic relations with Iran.

Unlike the United States, which has abandoned the nuclear deal with Iran, the Europeans are sticking to it. The German government and the EU have also confirmed in this respect their willingness to allow local businesses to continue to do business with Iran. But they can not protect them from American sanctions.

The banking association also reports and points out that in the past, for example, the US authorities had already fined the Commerzbank 1.45 billion euros for transactions in Iran. .

Additional penalties

The difficult situation may be even more difficult with the new US sanctions announced on November 5th. But even apart from this, Iran 's business carries many risks, such as the fight against money laundering and the financing of terrorism.

A lack of transparency, for example regarding donors, clients and structures with trading partners in Iran, would lead to a risk of unintentional violation of applicable rules – apart from profitability considerations.

"Since June 2018, virtually all banks have stopped their" Trade and Export Finance "activities, according to the document published by the Bankers Association. Iranian business was not very attractive to local institutions. Even though US sanctions create their own problems, the conclusion is that progress can only be made by Iran itself.