BERLIN, Aug 8 (Reuters) -
The German finance ministry on Wednesday denied a media report suggesting it would give Iran permission to withdraw 300 million euros ($348 million) in cash from bank accounts held in Germany, a plan that is strongly opposed by the United States.
Iran's request was still being studied, the ministry said in a statement. "Press reports about a so-called release of the funds through the customs office ... are not accurate. The screening processes have not yet been completed."
German weekly newspaper Die Zeit reported on Wednesday that the ministry's Financial Intelligence Unit had concluded the withdrawal would not violate German counter-terrorism laws and it had found no evidence the money could wind up in the wrong hands.
The U.S. government is pressing Germany to reject Iran's bid to withdraw the cash from the Europaeisch-Iranische Handelsbank AG (eihbank) because it says the money could be transferred to fund armed groups in the Middle East.
The U.S. embassy in Berlin this week said it expected Germany to block the cash withdrawal under new central bank rules on money laundering that take effect on Aug. 25.
Die Zeit said Washington had threatened to impose sanctions against the German central bank if it approved Iran's request.
Washington has announced new sanctions on Iran and ordered all countries to stop buying Iranian oil by November and foreign firms to stop doing business there or face U.S. blacklists.
Iran argues it needs the cash for Iranian citizens travelling abroad since they cannot access recognized credit cards.
The changes in Bundesbank rules will allow German authorities to demand explanations about the end destination of large cash withdrawals - which could allow the Iranian request to be denied.