Bank Melli Iran's branch in Hamburg is still operating despite renewed European sanctions and a fresh push from Washington to force its closure, highlighting a gap between the sanctions rules on paper and how they are being enforced on the ground in Germany.
The European Union reimposed nuclear related sanctions on Iran in September 2025 after France, Germany and Britain triggered the snapback mechanism built into the original nuclear deal. Bank Melli, Iran's largest state owned lender, is explicitly named on the resulting EU sanctions list.
Germany Confirms the Rules Apply, but Not a Closure
Germany's Foreign Ministry and financial regulators, including the Bundesbank and BaFin, have acknowledged that the sanctions cover the Hamburg branch. Even so, officials have given no indication that the branch will be forced to close, leaving it open in a kind of regulatory limbo where the restrictions apply on paper without triggering a shutdown.
The branch is not unfamiliar to German regulators. BaFin already imposed a credit ban on the Hamburg office back in 2021 after finding it had violated banking rules, though the branch has continued to appear in regulatory databases since then rather than being wound down entirely.
Washington Wants Every Branch Closed
The Hamburg branch's continued existence puts Germany at odds with the latest US campaign targeting Iran's finances. US Treasury Secretary Scott Bessent this week announced what officials are calling Operation Economic Outcast, an expanded sanctions push aimed at cutting off Iran's remaining connections to the global financial system, and one that explicitly calls for every Bank Melli branch worldwide, Hamburg included, to be shut down.
The American campaign extends beyond banking, adding new secondary sanctions across sectors including digital assets, technology, gold, aviation and shipping, and includes measures against dozens of entities, individuals and vessels accused of helping Iran route money and goods around existing restrictions.
Why It Matters
EU documents describe Bank Melli as Iran's largest bank, state owned and controlled, and note its role serving the country's defense and military logistics sectors, which is precisely why Western governments have targeted it for years. A functioning branch inside the EU, even a heavily restricted one, offers Tehran a foothold in the European financial system that Washington's latest campaign is explicitly trying to eliminate.
The standoff leaves Berlin in an uncomfortable position, caught between EU sanctions it helped trigger, a domestic regulator that has already flagged the branch for past violations, and mounting pressure from Washington to go further and shut the office down entirely.