BERLIN, Aug. 7 (Xinhua) -- Germany's savings banks and credit unions could become a potential solution for companies to continue to do business with Iran and bypass U.S. sanctions, a senior German politician has said.
European Union budgetary commissioner and Christian Democratic Union (CDU) politician made the statement to major German regional daily newspaper Rheinische Post.
Oettinger highlighted that the regionally-based and decentralized financial sector traditionally had few ties to U.S. financial markets and were hence less likely to be hit by the new sanctions regime.
Additionally, the CDU politician said that the European Commission was attempting to persuade the state-owned European Investment Bank (EIB) to expand its activities in Iran.
After U.S. President Donald Trump abandoned the Iran nuclear deal signed by his predecessor Barack Obama, a new raft of U.S. sanctions against Iran has been enacted on Tuesday.
Adhering to a traditional pattern adopted by U.S. governments to exert economic pressure on states considered as geo-political adversaries, Washington plans to strip Iranian companies of their access to the globally-dominant U.S. financial sector amongst others.
Aside from barring Iranian companies from acquiring dollars as a reserve currency, or as a monetary unit to invoice and settle international trade, even foreign financial institutes which have subsidiaries in the U.S. will be hit by sanctions unless they refuse to become involved in any transactions with counterparties from Iran.
Most European banks have consequently begun winding down their operations in Iran for fear of losing access to U.S. capital markets as a punishment, depriving German exporters of liquidity needed to conduct business with the country.
In June, European governments made a final and unsuccessful attempt to secure exemptions for their own companies from U.S. sanctions against Iran.
A growing number of business representatives in the EU have since urged policymakers in Brussels to instead set up an independent payments system with the specific purpose of processing euro-denominated trade with, and investments in, Iran without falling foul of U.S. sanctions.
Dagmar von Bohnstein, German business delegate in Iran, recently emphasized in a plea for help to the Berlin government that German companies in Iran were in urgent need of political solutions which enabled them to complete financial transactions while bypassing U.S. capital markets.
"The biggest problem is to find corporate banking providers which can complete transactions with Iranian counterparties without being penalized by U.S. sanctions," Bohnstein said.
The EU protested the re-imposition of U.S. sanctions on Tuesday and announced that it would seek to enable Iran to continue exporting petroleum beyond October.
Washington has warned other countries that they must choose between maintaining commercial relationships with the United States or Iran but finds itself increasingly isolated in its hawkish position on Iran.
German policymakers and business representatives have repeatedly criticized Trump's decision to backtrack on the Iran nuclear accord.
They urge Berlin and Brussels to do everything in its power to save the landmark international agreement reached in 2015.