US in talks with India on EIH issue

Washington (PTI) - The United States is holding
discussions with India on the issue of Europäisch-Iranische
Handelsbank (EIH), the Hamburg-based bank, which was slapped
with sanctions by it last year for its facilitation of Iran's
proliferation activities.
Early this month, the Indian government had decided to
make payments to Iran for the import of crude oil through EIH
in Euro currency.
At the same time nine influential US Senators have
warned that anyone doing business with this German bank would
be debarred from the US financial system.
In his interaction with foreign journalists this week,
the Under Secretary of Treasury for Terrorism and Financial
Intelligence, Stuart Levey, concede that the United States is
in conversation with the Indian Government on the latest
development of the EIH issue.
"I certainly don't want to comment about conversations
that we're having with the Government of India and relevant
institutions in India about how to handle this issue. I think
those are more appropriately left there," Levey told reporters
in response to a question.
"We have identified this bank that you refer to in
Germany as a bank that is facilitating Iran's nuclear missile
programmes, and therefore it has been designated, under our
proliferation authorities, as a bank that... - its assets are
frozen in the United States and it can't do business in the
United States," Levey said in response to a question.
"In addition, there's a separate law in the United States,
that President (Barack) Obama signed in July of 2010, which
says that any financial institution that's doing significant
business with a bank that is designated as EIH could lose
access to the US financial system," Levey said.
"Those are the kind of rules that we are responsible for
enforcing. I think that (Indian decision to make payments to
Iran through EIH) has presented issues that I think are being
worked on and being grappled with by financial institutions
around the world", he said.
These FIs have "largely have decided that because of the
information that we have made available about why we have
sanctions against certain Iranian banks, they don't want to do
business with those banks," the Treasury official said
"That remains a topic of ongoing dialogue with banks
around the world, including with authorities in India," Levey
said.
Nine US Senators in a letter dated February 1, wrote to
the German Foreign Minister expressing their concern that EIH
continues to conduct transactions on behalf of entities under
US and EU sanctions.

"EIH is one of Iran's few remaining access points to the
European financial system," said the letter.
It was signed by Senators Frank R. Lautenberg, Mike
Johanns, Barbara Boxer, Bob Casey, Scott Brown, Al Franken,
Kirsten Gillibrand, Mark Kirk, Jon Kyl, Joe Lieberman and
Jerry Moran.
"The threat of a nuclear-armed Iran is undeniable and we
must make sanctions as strong as possible to deny Iran the
economic means to develop those weapons.
"Europäisch-Iranische Handelsbank must halt these
practices or be closed immediately," they said.
Expressing their grave concern with the continued
financial support of Iran's nuclear proliferation activity by
Europäisch-Iranische Handelsbank (EIH) in Hamburg, the
Senators urged the German government to take immediate action
to end these practices.
"In September, the United States sanctioned EIH, citing
its role as a key financial lifeline for Iran and its
facilitation of Iran's proliferation activities.
EIH is one of Iran's few remaining access points to the
European financial system," the letter said.
"The bank has and continues to conduct transactions on
behalf of entities under US and EU sanctions, including Bank
Mellat, a designated supporter of the Atomic Energy
Organisation of Iran (AEOI).
The AEOI reports directly to the Iranian president and
is the main Iranian organisation for research and development
of nuclear technology," it said.
"We know Germany shares international concerns about the
Iranian regime, including its nuclear programme, support for
terrorism, and human rights abuses.
"The sanctions passed by the EU this summer sent a
strong message to Iran that we will not allow its illicit
behavior and violations of Security Council resolutions to go
unanswered.
"Yet, the continued operation of EIH allows the Iranian
regime to skirt the sanctions and undercut their
effectiveness," the Senators wrote.
The Senators said under US law, any financial
institution that continues to conduct business with EIH may
itself be barred from accessing the US financial system.
"Companies that continue to conduct trade with Iran via
EIH also face potential sanctions in the US, including
restrictions on exports to the US and access to US capital
markets," they said.