US issues advisory on Iran efforts to evade sanctions, illicit financial activities

The advisory’s aims include helping foreign financial institutions better understand the obligations of their US correspondents. (Reuters)

The US’s Financial Crimes Enforcement Network (FinCEN) issued an advisory on Thursday to aid financial institutions in identifying and reporting any possible illicit transactions related to Iran.

The advisory’s aims include helping foreign financial institutions better understand the obligations of their US correspondents, to avoid exposure to US sanctions and to confront the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) risks that Iranian activity poses to the international financial system.

The advisory also explained the Iranian regime’s deceitful means to evade sanctions.

“This advisory lays out in great detail the extent to which the Iranian regime uses deceptive practices, including front companies, fraudulent documents, exchange houses, seemingly legitimate businesses and government officials, to generate illicit revenues and finance their malign activities. Iran’s deceptive practices have been orchestrated not only by elements of their government such as the IRGC-Qods Force, but also by Central Bank of Iran officials who were at the highest levels. Any country that allows its Central Bank to be involved in deception in support of terrorism requires the highest levels of scrutiny, particularly when the country itself is the world’s largest state sponsor of terrorism,” Sigal Mandelker, Under Secretary of the Treasury for Terrorism and Financial Intelligence, said.

“Governments, financial institutions of all types around the world, and other companies need to be on high alert to the types of schemes described in this advisory. More than that, as we expect Iran to continue to attempt to engage in wide scale sanctions evasion while simultaneously using its resources to fund a broad array of malign activity, financial institutions should continue to sophisticate their compliance programs to keep these actors from exploiting them,” he added.

The advisory noted that the Iran Central Bank’s top officials exploited their official capacity to obtain hard currency and carry out transactions for the Islamic Revolutionary Guard Corps’ Qods Force and the Lebanese Hezbollah party.

FinCEN hence called on financial institutions to be cautious when dealing with exchange houses that may have exposure to the Iranian regime and to Iranian designated persons.

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Last Update: Wednesday, 20 May 2020 KSA 09:54 - GMT 06:54
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