Iran Threatens German Banks over Pull-out

A00954301.jpgTehran has threatened to bar major German banks that are pulling out of Iran due to US pressure and steep administration costs from returning to the country. The vice governor of the Iranian central bank, Mohammad Jafar Mojarrad, told the Financial Times Deutschland that the banks’ actions could have long-term consequences.

“We are not happy with the banks’ decision,” he said.

“There is no guarantee that one can return when the good times are here again.”

Mojarrad said that because business ties are based on trust, it would be “very difficult to re-establish trust when it has been abused.”

Deutsche Bank, the country’s biggest commercial bank, and Commerzbank have gradually withdrawn investments from Iran in recent months.

And Dresdner Bank has said it plans to pull the plug entirely on “its activities with Iran and in Iran,” citing excessive “bureaucratic expenses.”

The FTD said Dresdner Bank’s 2006 lending in Iran amounted to the low end of the hundreds of millions of euros, and had fallen to double digits this year.

Washington has said it is seeking to financially isolate Iran because its government has vowed to press ahead with its nuclear program in defiance of Washington’s will.

The FTD said that European financial institutions feared losing out on lucrative business with the United States if they remained active in Iran, after US officials threatened the banks’ boards with consequences.

“We know the German banks are under pressure but their decisions could have an impact on our business relations,” Mojarrad said.

He said that financial institutions in Asia, Russia and the Persian Gulf region were ready to jump in after the German banks withdraw.

“I would advise our friends not to leave this business to the competition,” he said, adding that Iran was well-placed to weather any withdrawal.

“We are adapting.”

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