WASHINGTON, March 31 (UPI) -- Officials in the U.S. Treasury Department said they were "concerned" that a German bank was facilitating Indian oil payments to Iran.
Tehran was selling crude oil to India on credit because the Reserve Bank of India closed the Asian Clearing Union in December. The ACU was used to buy crude oil from Iran, though New Delhi faced financial hurdles because of U.S. economic sanctions targeting Iran's energy sector.
New Delhi made a $2.07 billion payment to the Central Bank of Iran for crude oil imports following a three-month suspension during the first week of March. The cash moved to Iran through German bank Europaeisch-Iranische Handelsbank AG.
EIH would receive euros for the Iranian crude provided Indian importers issue notes saying the money wouldn't be used for sanctioned goods.
Officials in the U.S. Treasury Department told The New York Times they would work with U.S. allies "to isolate EIH."
"Treasury is concerned about recent reports that the German government authorized the use of EIH as a conduit for India's oil payments to Iran," one official told the Times on condition of anonymity.
Berlin said there is no legal basis to block business transactions between two entities. The German bank said it was "obligated" to conduct the transactions so long as they are "allowed by the regulations of the European Union."
Iran pumped more than 3.5 million barrels of oil in December, putting it in the No. 2 spot in the Organization of the Petroleum Exporting Countries. Iran is India's second-largest supplier of crude after Saudi Arabia.
