While Washington isolates Tehran, the EU allows Iranian banks to operate on its territory, reflecting diverging strategies on diplomacy, sanctions, and engagement.
Despite being under US secondary sanctions for over four years, Bank Saman continues to operate internationally, with branches in Germany and Italy. However, the EU has not sanctioned the bank, allowing it to function within its jurisdictions. This highlights a radical divergence between US and EU approaches to Iran’s financial institutions since the US withdrew from the JCPoA in 2018.
Iran’s relationship with the global financial system is still largely defined and constrained by US sanctions. Since 2018, the country has found itself navigating a deeper maze of restrictions, particularly those targeting its financial sector, which is vital to receiving payment for its hydrocarbon exports. With JCPoA now dead and Iran’s nuclear breakout now only contained by threat of force, its banks, including Bank Saman, face an uphill task engaging with foreign counterparties who view them with deep suspicion. Yet, while the US takes a hard line, having imposed secondary sanctions that cut Iranian banks off from global markets, European countries like Germany and Italy continue to engage with Iran on a different scale, allowing them to operate on their territory.
Bank Saman’s operations, particularly in Europe, show how different international actors are interpreting their obligations when it comes to Iran, a state that has been generously arming Russia since the outbreak of full-scale war in Ukraine in 2022 while also suppressing its own people domestically. It is therefore surprising that the EU has refrained from imposing its own sanctions on the bank, enabling it to keep running its European offices. This divergence lies at the heart of the broader geopolitical struggle over how best to approach Iran’s integration into the global financial system, when to punish and when to reward. The US continues to isolate Iran economically, an effort it will surely double down on during the second Trump administration, while Europe appears intent on offering economic channels for potential diplomatic engagement.
In 2020, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Bank Saman under Executive Order 13902, as part of a broader move to cut off Iranian financial institutions from the global system. This targeted the bank’s operations as part of the US’s broader strategy of ‘maximum pressure’, aiming to force Iran to curtail its regional activities in a bid to bring it back to the negotiating table for a more comprehensive deal than had been inked by the Obama administration in 2015. These 2020 sanctions imposed on Saman, built on earlier measures, designed to make it virtually impossible for US persons or entities to do business with the bank or its subsidiaries. Secondary sanctions were applied by Washington to deter non-US institutions that might attempt to work with the bank, imposing an ‘us or them’ dilemma. The decision to sanction Bank Saman stemmed from US concerns about Iran’s financial network, which was believed to be enabling its government’s controversial, violent and suppressive activities. The designation meant that any foreign bank or entity with a US connection, whether by financial transactions, equipment purchases, or other material support—could be penalized in various ways.
In stark contrast, Europe has taken a more pragmatic approach to Iran. Since signing up to JCPoA, the three European parties to the 2015 deal (Great Britain, France, and Germany) have sought to maintain diplomatic and economic relations with Iran, hoping that engagement would provide leverage for broader stability and eventual nuclear non-proliferation agreements. After the deal’s implementation the following year, several Iranian banks—including Bank Saman—re-established or expanded their operations in Europe, hoping to benefit from the détente with the West. Bank Saman, for instance, had already established a branch in Frankfurt, Germany in 2008, serving both European businesses with interests in Iran and Iranian clients in Europe.