Washington vs. Berlin US hypocrisy in Iran sanctions frustrates German business

Germany sees a double standard in enforcing embargoes on trade and finance with Iranian companies.
Quelle: DPA Picture Alliance
Driven to distraction in Tehran.
(Source: DPA Picture Alliance)

German business is growing increasingly frustrated with what they see as discrimination in enforcing US sanctions against Iran, as Washington intimidates German companies into “overcompliance” but looks the other way when US companies flout the restrictions.

It’s not clear, for instance, when deliveries of food or medication are exempted from the sanctions. Iran has become the biggest importer of US soybeans as they stockpile food reserves and ease the plight of American farmers hurt by Chinese tariffs. German companies don’t even dare ship medications.

American banks have a direct line to the Office of Foreign Assets Control, or Ofac, to clarify what shipments are allowed, while German companies and banks have little choice but to withdraw from Iran altogether.

The US Embassy in Berlin has prevented German service companies from accepting work with Iranian-owned firms. Elevator maintenance companies won’t serve Bank Melli in Hamburg. Deutsche Telekom cut off telephone and internet service to Iranian banks without notice. Commerzbank and Deutsche Bank have terminated customers with Persian-sounding names.

German banks don’t dare conduct any payments transactions for trade with Iran for fear of US reprisals. “The hostage for the American government is our New York branch,” complains the manager of a European financial institution.

“German businessmen have learned that when it serves to American advantage, the US will supply Iran, while they threaten European companies with sanctions,” says Helene Rang, managing director of the German Near and Middle East Association.

In an effort to circumvent the prohibition on payments, Germany, France and Britain have set up the Instex trading platform to clear transactions. But talks are still going on to establish the counterpart in Iran, which the platform needs in order to function.

America defiant

In the meantime, the US administration seems intent on escalating tensions with Iran. National Security Adviser John Bolton released a video on the fortieth anniversary of the shah’s removal, which opens with the greeting, “Iran tyrannizes its citizens and terrorizes the world.”

Washington portrays Iran as wanting to destabilize the Middle East and claims it is developing nuclear weapons, even though US intelligence services themselves reject this theory.

US Secretary of State Mike Pompeo is meeting this week with officials in Warsaw, prompting speculation in Berlin, Paris, and London that the US is seeking to divide Europe on the issue to weaken resistance to America’s Iranian policy.

At the same time, Washington is preparing new sanctions against Russia, including perhaps restrictions on trading Russian government bonds. Once again, the fear is that Europeans will have to bear the brunt of the US enthusiasm for sanctions.

There may be a method to this US hypocrisy, suggests Joshua Kirschenbaum from the German Marshall Fund, who worked at Ofac in the Obama administration. It is conceivable, he says, that Washington is deliberately leaving things unclear to keep foreign companies in the dark. “It seems reasonable to assume,” he says, “that the Obama administration would have taken a more accommodating position.”

Matthias Brüggmann is an international correspondent for Handelsblatt. Moritz Koch is a correspondent in Berlin. Klaus Stratmann covers energy policy from Berlin. Darrell Delamaide adapted this story into English for Handelsblatt Today. To contact the authors: [email protected], [email protected], and [email protected]