US in talks with India on EIH issue

WASHINGTON: The United States is holding discussions with India on the issue of Europäisch-Iranische Handelsbank ( EIH), the Hamburg-based bank, which was slapped with sanctions by it last year for its facilitation of Iran's proliferation activities.

Early this month, the Indian government had decided to make payments to Iran for the import of crude oil through IEH in Euro currency.

At the same time nine influential US Senators have warned that anyone doing business with this German bank would be debarred from the US financial system.

In his interaction with foreign journalists this week, the Under Secretary of Treasury for Terrorism and Financial Intelligence, Stuart Levey, concede that the United States is in conversation with the Indian Government on the latest development of the EIH issue.

"I certainly don't want to comment about conversations that we're having with the Government of India and relevant institutions in India about how to handle this issue. I think those are more appropriately left there," Levey told reporters in response to a question.

"We have identified this bank that you refer to in Germany as a bank that is facilitating Iran's nuclear missile programmes, and therefore it has been designated, under our proliferation authorities, as a bank that its assets are frozen in the United States and it can't do business in the United States," Levey said in response to a question.

"In addition, there's a separate law in the United States, that President (Barack) Obama signed in July of 2010, which says that any financial institution that's doing significant business with a bank that is designated as EIH could lose access to the US financial system," Levey said.

"Those are the kind of rules that we are responsible for enforcing. I think that (Indian decision to make payments to Iran through EIH) has presented issues that I think are being worked on and being grappled with by financial institutions around the world.", he said.

These FIs have "largely have decided that because of the information that we have made available about why we have sanctions against certain Iranian banks, they don't want to do business with those banks," the Treasury official said

"That remains a topic of ongoing dialogue with banks around the world, including with authorities in India," Levey said.

Nine US Senators in a letter dated February 1, wrote to the German Foreign Minister expressing their concern that EIH continues to conduct transactions on behalf of entities under US and EU sanctions.