ACCORDING to an English idiom ‘actions speak louder than words’, and despite Iran’s words of denial and evasion, it is still playing a key role in stoking the fuel of unrest in the region by continuing to finance terrorism. Through money laundering operations worth billions of dollars run by fake companies across the Middle East, the Caucasus, South Korea, and the Caribbean, Iran has managed to circumvent the sanctions placed upon it and to spend billions of dollars on terrorist organizations in the region. Its support of armed militia in Iraq, Syria, Yemen, Lebanon, and Gaza has turned the region into a hotbed of blood and destruction.
In 2016, for the third year in a row, the Basel AML Index, issued by the Basel Institute on Governance, ranked Iran as No. 1 in the world in terms of money laundering and terrorist financing, out of 149 countries surveyed. In September 2016, President Hassan Rohani’s government signed the Financial Action Task Force (FATF) agreement. FATF is a pioneering organization which has been fighting the financing of money laundering and terrorism for the last 20 years, having been established by the G-7 Summit in Paris in 1989. The organization set a 12-month deadline for Iran to change its behavior and warned that if the terms of the resolution were violated, it would be placed on the list of countries that support terrorism.
Heated debate between the government and the Revolutionary Guards is going on inside Iran following the signing of the agreement, as the Guards argue that it will destabilize their overseas activities that rely on money laundering for funding, as well as undermining the financing of Iran’s military intervention in Syria, Iraq, and Yemen, and pro-Iranian militia around the world. However, the government’s need to support its economy forced it to sign the agreement in a bid to lift the banking and remittance sanctions imposed on Iran.
It also hoped that the signing of the agreement would pave the way to resuming the still-frozen remittances between Iranian banks and the international and regional financial institutions. When the resolution targeted some transactions that were suspected to have been conducted by individuals close to the top hierarchy of the regime and institutions of the Revolutionary Guards in Iranian banks, leaders of the Revolutionary Guards worked on freezing and circumventing the resolution.
In July 2017, one year after signing the agreement, FATF issued a statement warning against financial dealings with Iran due to its continued involvement in money laundering to finance terrorism, and because it had not taken adequate measures to combat such activities. The statement called on member states to advise their financial institutions to scrutinize any transactions with Iran carefully.
It is essential that the international community should take a firmer position to address Iranian terrorism and cut off the sources through which it is able to fund terrorist organizations. Iran will not desist from money laundering and financing terrorism unless the approach of its political system and its foreign policy pattern is changed. According to reports from international organizations Iran’s illicit activities are still ongoing, and the country is still at the forefront of state sponsored terrorism.
Dr. Ibrahim Al-Othaimin is a Middle East affair specialist and security analyst based in Riyadh. He can be contacted at Ibarhim.othaimin@gmail.com. Follow him on Twitter @Alothaimin
