BANKING & FINANCE

Coincidental documents reveal Iranian Guard smuggled billions via Bahraini bank

Bank accounts were tied to individuals convicted of crimes including money laundering and terror financing. (AP)

Iranian owners of a Bahraini bank have complained about Manama to an international arbitration court in the Netherlands, following its closure. Bahrain responded with documents proving that $7 billion was smuggled through suspicious accounts with the consent and knowledge of the bank’s management.

Documents obtained by the Washington Post submitted by Bahrain against the “Future Bank”, which closed in 2015, revealed Iran’s secret assistance in evading international sanctions and smuggling billions of dollars over more than a decade.

Future Bank, established in 2004 as a joint venture between Bahrain’s Ahli United Bank and Iran’s Bank Melli and Bank Saderat, had previously been accused of helping Iran skirt trade restrictions, allegations that led US and European officials to blacklist the bank. The Post said that one of the more controversial allegations involves a Shiite cleric with close ties to opposition movements.

Bahraini officials criticized Future Bank for allowing the cleric, Isa Qassim, to make cash deposits totaling millions of dollars over several years, and directing some of the money to a charity Bahraini officials have linked to terrorism. Audits revealed then that in hundreds of cases, bank transfers were accompanied by specific instructions to avoid references to Iran or Iranian banking codes.

Phantom loans

The bank, according to the documents, concealed at least $7 billion of transactions between 2004 and 2015, a time when many Iranian banks were barred by sanctions from accessing international financial markets, the records show.

Auditors also discovered hundreds of bank accounts tied to individuals convicted of crimes including money laundering and terrorism financing, as well as phantom loans provided to companies that operate as fronts for Iran’s Islamic Revolutionary Guard Corps, according to confidential court filings obtained by The Washington Post.

The report said that among the practices cited in the report was a systematic use of “wire-stripping,” the deliberate removal or changing of identifying information when transferring money between banks. Auditors said they discovered more than 4,500 instances of wire-stripping by bank officials to conceal Iran’s role as the sender or recipient of funds.

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Last Update: Thursday, 5 April 2018 KSA 17:25 - GMT 14:25
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