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Decision in Court: How Donald Trump ensured that the Hamburg bank Melli lost its telephone connection

Did Deutsche Telekom illegally cut the service of a bank – in advance obedience to the
then US President? The European Court of Justice should clarify that. The verdict could
be groundbreaking.

Photo: Regina Wank / dpa

Actually, it’s just about a telephone connection and a customer that Deutsche Telekom would rather get rid of. The Hamburg- based Bank Melli does not want to accept the notice of termination that has been sent to it. She has always paid her bills on time and it’s about principle.

Bank Melli is not just any financial institution, but the Germany branch of Iran’s largest commercial bank . In the meantime she has sued through all instances, up to the European Court of Justice, and the result of the hearing this Tuesday in Luxembourg should answer questions that go beyond the disagreement between two business partners.

The judges in Luxembourg are of course supposed to clarify whether Telekom has to continue to serve the bank. But there is still much more to be debated: For example, the question of whether the federal government is even willing to protect and enforce its economic interests against third powers, in this case against the USA . “Our goal is to establish at the highest level that European law also applies to the US president within the EU,” says Hamburg lawyer Philip Plath, who specializes in sanctions law and advises Bank Melli.

Telekom terminated the bank’s telephone connections because the Americans asked the Bonn-based telecommunications company to do so after the then US President Donald Trump withdrew from the Joint Comprehensive Plan of Action (JCPOA) on May 8, 2018, the so-called nuclear agreement.

Unlike the other contracting parties China, Russia , Great Britain , France and Germany, who focused on rapprochement with Iran with the nuclear deal , Trump sought confrontation: his plan was to force the government in Tehran into the “toughest sanctions in history” Force knees.

Trump is now history himself. His successor Joe Biden is struggling to renegotiate and revive the agreement if possible. And Chancellor Angela Merkel phoned Iran’s President Hassan Rouhani last week after Tehran announced that it would limit inspections by the International Atomic Energy Agency.

Bank Melli in Hamburg fell victim to Trump’s sanctions policy. Because whoever was not ready under him to follow the Iran sanctions classified as illegal in Europe and to break off business relations with Iran, was openly threatened with the loss of his US business.

“Our goal is to establish at the highest level that European law also applies to the US president within the EU.”

Attorney Philip Plath

It didn’t help that Foreign Minister Heiko Maas protested. To defend against Trump’s boycott of Iran, the EU upgraded the old blocking regulation from 1996. According to this, the enforcement of the new American sanctions on Iran by European companies with a threat of fines of up to 500,000 euros is prohibited.

But that didn’t bring success either. On the contrary, Trump’s ambassador to Berlin at the time , Richard Grenell , was particularly keen to implement his master’s campaign. Grenell referred to lists of German companies with Iran contacts, quoted company representatives in the US representation, threatened, set deadlines.

Other companies also parried

Anyone who criticized Grenell’s rude practice as an assault, like the managing director of the Berlin Near and Middle East Association, Helene Rang, dared to do so in an interview, was immediately a target himself. Club members received calls from the US embassy, ​​they were urged to quit their organization.

Most corporations parried.

“We have determined that your company is registered on the current SDN list of the Office of Foreign Assets Control (OFAC),” wrote a subsidiary of Daimler AG in December 2018 to an Iranian steel trader in Düsseldorf . “Mercedes-Benz Leasing is not allowed to maintain any contractual relationships with persons and companies that are on this list.” The Stuttgart-based car manufacturer terminated the contract “with immediate effect for an important reason”.

Like Daimler, Telekom is also active around the world. Of its almost 210,000 employees, almost 50,000 work in the USA, around fifty percent of sales are generated in America . In a protective letter to the court, the Telekom legal advisor writes that the company is afraid of being »excluded« from public procurement. The company can therefore not be expected to continue the contractual relationship with Bank Melli. But he also did not apply for an exemption from the EU, which would have been possible.

“#Sanctionsareworking #thankyouDeutscheTelekom” cheered Ambassador Grenell on Twitter when Bank Melli soon complained of difficulties because banks refused to make transfers and canceled their elevator service and the telephone provider.

Neither Deutsche Telekom nor Daimler AG responded to requests from SPIEGEL about the case.

From a legal point of view, the matter seems clear: Telekom boycotted Bank Melli illegally and the termination of its service, as lawyers from the EU Commission noted in their court submission, “must be regarded as ineffective”.

How far the boycott ban will serve as a lever against sanction demands from Washington is still completely unclear. From Berlin diplomatic circles it is said that nobody in the Ministry of Economic Affairs is interested in jeopardizing the export business to the USA.

Bank Melli managing director Helmut Gottlieb hopes, however, that if he wins the process, the EU Commission will finally “arm” the boycott ban as an instrument, meaning the active prosecution of illegal boycotters. Otherwise the EU would leave its sovereignty to the “law of the strongest”.