Sanctions

Banking on Iran

BMW and Mercedes Benz Car Dealer In Tehran
With sanctions easing, German-Iranian relations are revving up. Photo: Franco Czerny/Getty Images

Franz Josef Nick was inspired during his first visit to Iran – first and foremost by the amount of German cars speeding through the busy streets of the capital, Tehran. “Made in Germany still means something here!” the 58-year-old banker with long gray hair exclaimed.

When he left his post as chief executive of the Targobank in Düsseldorf two years ago, Mr. Nick assumed his career in banking had come to a close. He initially worked as a freelance lawyer until he received an inquiry from Nader Maleki. The Frankfurt-based financial lobbyist, a native of Iran, wanted Mr. Nick to help find support for Iranian banks in Germany. A challenging idea, to say the least, but one with legs.

International sanctions due to Iran’s nuclear-related violations brought both trade and payment transactions between Iran and the EU to a standstill. These included a mix of UN, US and EU restrictions on trades in arms, oil and transfers of funds, as well as the freezing of both Iranian central bank assets and those of other major commercial institutions.

Only after the end of EU sanctions was announced in early 2016 have monetary transfers begun to take place. Since then, trade between Iran and Germany has risen by a good 20 percent; some 1,000 German entrepreneurs have traveled with delegations to Tehran to meet with potential business partners. Nevertheless, relationships remain difficult, and many German banks refuse to finance commercial deals. “Small and midsize companies would like to export much more,” Mr. Maleki said.

This year, at least one Iranian bank has the possibility of opening a branch in Germany, with four more applying for licenses from German financial authorities. Others want to follow suit: Middle East Bank and Saman Bank have identified opportunities in Germany. But will clients actually use their services? Are they welcome? And what about German businesses in Iran?

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