UN: Iran skirting sanctions by buying banks
A United Nations Security Council report says that Iran is skirting international sanctions by
buying banks and money changers overseas.
The report was submitted three weeks ago to the Security Council by the UN Panel of Experts, a group that monitors compliance with UN sanctions imposed on Iran.
The report was leaked to the Internet and obtained by a number of leading Israeli-defense analysts.
The report found that Iran often uses money-exchange bureaus overseas to transfer money to, and then has it converted into dollars or euros.
The bureau then transfers the money to an intermediary bank – in places like Dubai and Turkey – and then to a bank in the manufacturer’s country.
“The end-user’s name does not appear on the transaction, so the ultimate recipient of funds is not aware they are coming from a sanctioned entity,” the report explained.
The experts also warned that Iran is attempting to build covert financial infrastructures to facilitate the deals it requires to continue its nuclear and ballistic missile programs.
One country told the panel that Iran has made 10 different attempts to buy foreign banks since 2009, and has also tried setting up banking institutions in parts of South America.
To transfer the equipment purchased, Iran uses its fleet of cargo freighters, controlled by the state-owned IRISL shipping company.
The report revealed that between late 2008 and mid-2010, 76 out of 123 of IRISL’s vessels were renamed with many of the Farsi names replaced by English ones, and in some cases with new paint jobs. In addition, as of 2010, more than 70 percent of Iranian-owned vessels were registered in Malta, a well-known flag of convenience.
The report urges the Security Council to enforce rigorous end-user checks and vigilance to the risk of re-export on the part of all exporters.
Sanctions are really going to stop Iran from pursuing nuclear weapons, aren't they? What could go wrong?
Labels: EIH Bank, Iran sanctions regime, United Nations Security Council
Ahmadinejad bites the hand that feeds him
Iranian President Mahmoud Ahmadinejad doesn't have too many friends in this world, and he may have just blown a friendship today. Angela Merkel's Germany has probably done more to facilitate Iranian trade than any other country in the West. On Tuesday, Merkel was supposed to overfly Iran on her way to India, but at the last minute, permission for the overflight was withdrawn and Merkel's plane had to circle Turkey for two hours until it was restored. Ahmadinejad claims the flight was barred due to a '
technical glitch.' Hmmm.
This might be the time to call Merkel about
shutting down EIH Bank in Hamburg.
Labels: Angela Merkel, EIH Bank, Hamburg, Iran, Iran sanctions regime, Mahmoud Ahmadinejad
German-based Iranian bank fighting EU sanctions
The Hamburg, Germany-based Europäisch- Iranische Handelsbank (EIH) is announcing on its website that it will
fight European Union sanctions over its participation in Iran's nuclear weapons program.
According to a report in the German-language edition of the Financial Times on Thursday, EIH will mount a legal challenge to the European Union decision to sanction its operations because of its involvement in Iran’s nuclear-proliferation program.
The Financial Times said it was the first instance of a EU-sanctioned institution seeking to invoke EU-legal measures to prevent its closure.
Harald Hohmann, a German- export lawyer representing EIH, told the paper that the proof does not meet the standards of closure, and he will litigate the matter before the European Court of Justice in Luxembourg.
Last Monday, the EU listed the EIH as a sanctioned entity, froze its accounts and prohibited the 27 EU member countries from engaging in financial transactions with the German-based bank. The EU explained that EIH conducted business with other sanctioned Iran banks.
“As of October 2010, EIH was continuing to act as a conduit for payments by sanctioned Iranian banks, including Bank Mellat and Bank Saderat,” the EU statement read.
What could go wrong?
Labels: EIH Bank, European Union, Iran sanctions regime, Iranian nuclear program
Why the Germans are busting the Iran sanctions
Benny Weinthal has been all over the EIH Bank story since he broke it at the end of last week (and even before). In a nutshell, the Hamburg-based German-Iranian bank colluded with the German Central Bank (the Bundesbank) to clear some 9 billion euros in oil transactions for the Iranians.
But the real question is why. Why is the German Central Bank so ready to flaunt the international sanctions against Iran? Benny has the answer, and
once again it's Obama.
The Bush administration enjoyed remarkable success in pressuring German chancellor Angela Merkel to recoil from some of her country’s pro-Iran bank policies — including twisting her arm to pull the plug on German banks active in Iran — but Obama’s verbal powers have proved to be largely impotent. It is worth recalling that President Obama called Chancellor Merkel last year and urged her to shut the EIH operation, according to veteran columnist John Vinocur: “[I] have been told that similar reluctance, this time involving German hesitation to clamp down on a bank in Hamburg facilitating suspect European deals with Iran, resulted in a recent phone call, to no immediate avail, from Mr. Obama to Chancellor Angela Merkel.”
Over at The Weekly Standard, my colleagues Mark Dubowitz and Laura Grossman note: President Obama made sanctions on Iran’s energy sector a central part of his strategy in dealing with Tehran. With Iran continuing its march toward obtaining nuclear weapons, the selection of a single Iranian company and now a lone Belarusian one — among scores of companies that are now likely in violation of U.S. sanctions law — has not inspired congressional confidence. Nor are these sanctions likely to frighten major players in the international energy industry.
In short, while the first Merkel administration feared that George W. Bush would penalize German banks and firms because of their flourishing Iran business deals, the second Merkel administration sees Obama’s Iran-sanctions strategy as wallowing in non-enforcement. All of this helps to explain why Chinese and Russian firms — two of the major sanctions-busters — are not running scared from the Obama administration either.
I guess that's what happens when your leadership decides that you're not a superpower anymore: No one thinks they have to listen to you.
What could go wrong?
Labels: Angela Merkel, Barack Obama, Bundesbank, EIH Bank, Guido Westerwelle, Iran sanctions regime
A United Nations Security Council report says that Iran is skirting international sanctions by buying banks and money changers overseas. 
