Bank Melli Iran's branch in Hamburg remains open despite EU sanctions that Germany says apply to the Iranian state-owned bank's German operation, as Washington steps up pressure for its foreign branches to be closed.
The German Foreign Ministry, responding to questions from Iran International, said Bank Melli and its Hamburg branch were already covered by wide-ranging EU restrictions.
“Bank Melli Iran is already subject to far-reaching sanctions at EU level, and this of course also applies to Bank Melli's branch in Germany,” the ministry said.
The ministry did not say whether Germany was considering closing the Hamburg branch or whether Washington had formally asked Berlin to do so.
US pressure
The questions follow US Treasury Secretary Scott Bessent's launch earlier this week of “Operation Economic Outcast,” a campaign aimed at cutting Iran's financial and commercial links abroad.
Bessent specifically targeted Bank Melli, saying “every Bank Melli branch must be shuttered.”
The German Foreign Ministry said Berlin had taken note of Bessent's announcement and remained in talks with Washington and other partners.
“The federal government has taken note of US Treasury Secretary Bessent's announcement and is in constant contact with the US as well as other partners in the EU and in the region regarding further measures against Iran,” it told Iran International.
Berlin gave no indication in its response that a decision had been made on the future of the Hamburg branch.
EU sanctions
The European Union reimposed nuclear-related sanctions against Iran in September last year after France, Germany and Britain triggered the snapback mechanism the previous month.
The measures restored asset freezes on listed Iranian entities and broader restrictions on trade and financial activity.
Bank Melli is explicitly listed under the EU measures along with all its branches and subsidiaries.
EU documents describe Bank Melli as Iran's largest bank, owned and controlled by the Iranian government, and say it provides services to the Ministry of Defense and Armed Forces Logistics.
Under the sanctions, funds and economic resources belonging to or controlled by listed entities must be frozen, and funds or economic resources generally cannot be made available to them directly or indirectly.
EU rules also restrict transfers involving Iranian banks and their branches, while providing exemptions and procedures under which competent authorities can authorize certain transactions.
German oversight
The German Foreign Ministry said the Bundesbank was responsible for implementing EU and UN financial sanctions under Germany's foreign trade framework and referred questions about banking supervision to BaFin.
The Bundesbank says its Financial Sanctions Service Center is Germany's authority for implementing restrictions on capital and payments.
BaFin declined to comment to Iran International on possible measures involving Bank Melli, citing legal confidentiality requirements concerning individual financial institutions.
The regulator told Iran International that Bank Melli remained in its official database and said any final measure that could legally be made public would be published on its website.
BaFin has previously acted against the Hamburg branch.
The regulator said in October 2021 that it had imposed a credit ban on the branch on September 7 of that year after finding that it had breached the four-eyes principle required under German banking rules.
Iran International has also asked the Bundesbank how the restored EU sanctions are being implemented in relation to Bank Melli's Hamburg branch. The central bank had not responded by the time of publication.
For now, Germany has confirmed that EU sanctions apply to the branch but has not said it plans to close it, even as Washington presses foreign governments to shut Bank Melli operations abroad.
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