🔶 EU sanctions pushed Germany’s Frankfurt branch of Bank Sepah into insolvency

🔶 EU sanctions pushed Germany’s Frankfurt branch of Bank Sepah into insolvency

BaFin (the German Federal Financial Supervisory Authority) on September 10 (Shahrivar 19) officially declared Bank Sepah’s Frankfurt branch to be subject to a “compensation scheme.”

According to BaFin, Bank Sepah Frankfurt is no longer able to repay its customers’ deposits.

Earlier, on September 4, BaFin had asked the Frankfurt court to initiate an insolvency procedure for Bank Sepah. The court also, on the same day, began reviewing the insolvency of the institute’s assets and appointed a manager for the insolvency process.

Bank Sepah’s Frankfurt branch is a dependent branch and, legally, not independent from Bank Sepah in Tehran; that is, it is a branch of a bank based in a third country. The parent bank is fully owned by the Iranian government. As a result of EU sanctions against Bank Sepah, the German branch no longer had access to the European payment system—a situation that made the bank’s continued operations in the long term practically impossible.

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