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Iran said to back down from plan to fly 300 million Euros out of Germany

FILE - In this April 4, 2015 file photo, Iranian and U.S. banknotes are on display at a currency exchange shop in downtown Tehran, Iran.
AP Photo/Vahid Salemi, File

There will be no cash infusion to the Iranian government after Tehran unexpectedly scrapped its plan to fly 300 million Euros in cash from its bank in Hamburg in preparation for US sanctions, a German newspaper reported. The plan, first published in June, drew ire from Washington, which warned the money would be used to finance terrorism.

The European-Iranian Trade Bank (EIHB) was founded in 1971 under the Shah and today belongs to the Mullah regime and manages its assets. Among other assets, the bank has for years handled Iran's oil exports to India, accumulating billions of Euros in the process.

But sanctions introduced in 2011 over Iran’s nuclear program crippled the bank’s activity. Only in 2016, following the signing of the nuclear deal and Tehran’s commitment to freeze the program, was it allowed to get back to business.

In anticipation of re-imposed US sanctions, the Iranian regime had devised a plan: to liquidate 300 million Euros in assets and have the money delivered to a representative of Tehran, who would then accompany the cargo to Iran on board one of its vessels.

The Munich-based newspaper Süddeutsche Zeitung reported that the intended middleman was Ali Tarzali, the assistant director of the International Department at the Central Bank of Iran, who is on a US sanction list for allegedly providing assistance for the Quds Force, a special unit of Iran’s Revolutionary Guard.

As justification for the transaction, the regime cited an urgent need to replenish its cash reserves before the US sanctions against the Iranian financial sector came into force. Iranian officials that are denied internationally recognized credit cards are said to often use cash Euros for overseas travel.

STRINGER (SEPAH NEWS/AFP/File)

The German Bundesbank was asked to approve the transfer, and came under intense pressure to block it. US authorities reportedly reached out to the Chancellery, the Ministry of Finance, and the Foreign Ministry, insisting the funds would be used for the support of terrorist organizations.

In response, the Federal Financial Supervisory Authority launched an audit to rule out possible terror links. The Bundesbank also changed, as of this week, its conditions allowing it to block transfers unless it receives assurances that a transaction doesn’t violate financial sanctions or money-laundering rules.

But the inquiry yielded inconclusive results, leaving German authorities with insufficient grounds to deny the transfer, as the reasoning provided by the regime was deemed plausible.

In the end, however, it was Tehran that brought the deal to a halt, seemingly dropped its bid to repatriate the 300 million Euros. The Süddeutsche Zeitung reported Tuesday that the regime suddenly rescinded the transfer request, although cautioning that it might seek to make the transaction at a later date.

The German government has been actively working to save the Iran nuclear, scrambling to offer Tehran incentives to continue complaining to its terms despite the US withdrawal.

Most recently, Germany’s Foreign Minister Heiko Maas called upon Europe to set up payment systems independent of the United States, to maintain financial channels to Iran.

Also the German Economy Ministry stressed that Berlin would continue to offer export and investment guarantees for firms doing business with Iran, while pursuing an exemption for German companies from US sanctions.

“Every day the deal is alive is better than the highly explosive crisis that would otherwise threaten the Middle East,” Maas wrote in German newspaper Handelsblatt.

Polina Garaev is i24NEWS's correspondent in Germany.

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