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Wary of repercussions, EU unlikely to defy re-imposed US sanctions on Iran

Germany’s central bank decides to prevent Iran from withdrawing 300 million euros ($350 million) after Western governments warn that Iran would use the funds for terrorism.

Iranian Supreme Leader Ali Khamenei: “If Europe Does Not Meet Our Demands, We Will Have the Right to Renew Our Nuclear Activity.” (Iran’s Channel 1 TV on May 24: MEMRI)
Iranian Supreme Leader Ali Khamenei: “If Europe Does Not Meet Our Demands, We Will Have the Right to Renew Our Nuclear Activity.” (Iran’s Channel 1 TV on May 24: MEMRI)

Germany’s central bank, Deutsche Bundesbank, has announced measures aimed at preventing the transfer of 300 million euros ($350 million) to Iran in yet another blow to Iran’s efforts to bypass U.S. sanctions.

The United States pulled out of the 2015 Iran nuclear deal in May and announced the re-imposition of U.S. sanctions that had been lifted under the deal. The new sanctions were set to take effect on Monday, with American officials warning that they would hurt anyone who does business with Iran.

In recent weeks, U.S. and European intelligence agencies flagged a European-Iranian Trade Bank request to withdraw 300 million euros from the Deutsche Bundesbank. Iran claimed the cash is necessary so that Iranian citizens can use foreign currency when they travel, but Western governments warned that the cash would be used to fund Iran’s terrorist proxies.

Fearing repercussions from the U.S. Treasury, the German bank decided last week to introduce the new rules to prevent the withdrawal. This move was likely coordinated with the German government.

In recent months, the E.U. has said that it will try to salvage the Iranian nuclear deal, despite the U.S. withdrawal and renewed sanctions.

Initially, the E.U. explored the possibility of compensating European firms that would be affected by the new sanctions, using the European Investment Bank.

This effort was torpedoed by the EIB, which said it might be blacklisted by the U.S. Treasury of it was part of a scheme to offset the sanctions. EIB President Werner Hoyer said two weeks ago that “doing business in Iran is something that we cannot be actively engaged in.”

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