Germany EIH Bank takes legal move to unfreeze assets

Germany EIH Bank takes legal move to unfreeze assets

German trading bank Europaeisch-Iranische Handelsbank AG (EIH) confirmed on Friday it had filed a suit at the European Court of Justice challenging the EU's decision to freeze its assets after it processed Indian payments for Iranian oil.

September 24, 2011 4:34 by Reuters

Sanctions were imposed on the bank in May by the Council of the European Union under 2010 regulations restricting trade and investment in Iran.

“We believe that EIHB has at all times acted in accordance with applicable EU legislation,” an official from the Hamburg-based bank wrote in an email on Friday.

“All transactions were either authorized by Deutsche Bundesbank or fell within exceptions to the applicable EU legislation or conformed to the rulings and guidance of Deutsche Bundesbank and the German government.”

The bank filed the suit on Aug. 3 in a bid to get the sanctions removed and its assets unfrozen, but did not announce the legal move at the time. The ECJ does not normally announce when suits are filed.

The official said EIH’s core business was the facilitation of commercial relations between European and other countries, and Iran. She said the Indian payments for Iranian oil had only been a minor aspect of its activities.

When the EU imposed sanctions on EIH, the bank had been under close observation by the German government and was on a U.S. blacklist for facilitating billions of dollars of transactions with firms under sanctions for aiding Iran’s nuclear or missile programmes.

It came under scrutiny earlier this year when it emerged Berlin had allowed India to pay for oil purchases from Iran via the bank, after India restricted its own direct payments to Iran in order to placate Washington.

The UN Security Council imposed sanctions on Tehran for refusing to freeze its uranium enrichment programme, which Western powers suspect is aimed at producing a nuclear weapon. Iran says its nuclear programme is for peaceful energy needs.

When it imposed sanctions on the bank in May, the EU said: “EIH has played a key role in assisting a number of Iranian banks with alternative options for completing transactions disrupted by EU sanctions targeting Iran.”

Israel and the United States had lobbied for Germany to shut down the bank, saying it supported the proliferation of weapons of mass destruction by handling payments to known participants in Iran’s nuclear programme. (Reporting by Sebastian Moffett; Editing by Sophie Hares)