Information received from senior European financial sources:
Dormant Iranian funds in Europe are used as collateral in Semi-financial institutions in the continent, these funds are mainly deposited in major banks in Europe e.g Deutche bank, Commerz bank and HSBC.
The collateral enables Iranian-owned companies registered in Europe, as local companies, to receive credit lines and loans in favor of large-scale purchasing activity from European entities and companies, mainly by conducting close banking relations with second tier banks e.g Landes Bank, Stadsparkasse and European-Iranian Trade Bank (EIH).
The guidance is being conducted by the central banks of Germany and Iran. We have recently learned the German ambassador to Iran Mr. Michael Klor-Berchtold together with Mr. Per Fischer along with official members from EU had met representatives of the Iranian Foreign ministry and Iranian central bank in order to provide their overwhelming support to this agenda. The above understanding was approved by the president of Deutche Bundsbank Mr. Jens Weidmann and the governor of Iran’s central bank Mr. Hemmati Abdolnasser during the annual 2018 IMF meetings.
The dormant Iranian funds in Europe also serve as a foundation which allows for the base and source of funds to be offset as part of the new European trade mechanism INSTEX.
This method was institutionalized during the period between the implementation of the nuclear agreement between Iran and the superpowers and its cancellation, and due to an Iranian strategic decision to leave the funds in Europe, (even though most of the funds were unfrozen upon the signing of the agreement), in preparation for the possibility of potential future sanctions and in light of the complexity of deploying payments for trading and purchase of goods by Iranians from Europe.
This very use of this method illustrates the European desire to trade with Iran, which in effect bypasses U.S. sanctions and policy.
To support their cause, meetings of senior Iranian and European officials (led by the heads of central banks) in Tehran and European capitals are being held constantly, in order to approve the aforementioned activity, for example, we have learned, high level representatives from Iran and Germany convened in Tehran recently, to discuss challenges and come up with mutually beneficial ways of finding solutions to issues created by the reposition of U.S. sanctions against Tehran.
Most of the funds which rely on dormant funds are used for transactions meant to allow business with companies and entities controlled directly and indirectly by the IRGC and the Iranian regime.
These European-Iranian extraordinary efforts began immediately after the repositioning of the sanctions and as Germany exports to Iran soared. This surge strengthen the willingness among mid-sized European companies to continue doing business with Iran despite the risk of being blacklisted by U.S. for defying its sanctions as outlines above.