Sunday, November 1, 2020

Iraqis Linked To Iran Use Money-Laundering Scam To Beat US Sanctions

-

Iraqi individuals and companies linked to Iran are smuggling cash out of the country to avoid financial sanctions imposed by the US Treasury.

Despite technically being denied access to US dollars by Iraq’s central bank, they are exploiting the bank’s daily auction of hard currency by employing middlemen to convert Iraqi dinars into dollars.

The funds are then transferred out of Iraq using private exchange offices.

“In previous months, the daily release rate of the dollar at the currency auction was between $150 million and $180 million, sometimes up to $200 million. In the past few days it has reached $270 million,” the owner of a large currency exchange and financial transfer office in Baghdad told Arab News.

- Advertisement -

There is “no noticeable justification” for the sudden increase in dollar purchases, exchange operators said. Traders at Shorja Market, the largest wholesale market in Baghdad, told Arab News the surge in remittances could not be explained by any changes in the market, where there had been a shortage of hard cash since the end of last year.

Daily buying and selling remained weak, they said. One prominent banker told Arab News:

“Traders have nothing to do with this fever; 80 percent of the remittances that were made this week were cash transfers, and will be delivered by hand.”

On July 18, the US Treasury’s Office of Foreign Assets Control imposed financial sanctions on groups and individuals including two commanders of pro-Iranian paramilitary groups and two former governors supported by Iran.

- Advertisement -

Read MoreUnaoil’s former Iraq partner pleads guilty to bribery

The sanctions were imposed under the Global Magnitsky Human Rights Accountability Act, targeting “perpetrators of serious human rights abuses and corruption,”and banned any financial dealings with those named.

In response, the Central Bank of Iraq issued a circular to all Iraqi banks ordering them to freeze the accounts of anyone targeted by sanctions, and prevent their access to funds.

There was a wave of criticism and anger from Iraqi politicians and leaders of armed factions, especially those associated with Iran, who complained of “unilateral sanctions that violate Iraqi sovereignty and target Iran and its allies in Iraq under the pretext of human-rights abuses and corruption.”

The protests were accompanied by heavy pressure on Iraqi Prime Minister Adel Abdul Mahdi and the governor of the central bank to change the policy.

Four days later the bank issued a new circular that limited the financial freeze to US dollars only, permitting withdrawal of Iraqi dinars. It was then that the surge in dollar purchases through middlemen began.

Bankers said depositors were withdrawing their funds in Iraqi currency “to avoid attracting the attention of the US Treasury, which monitors the movement of the dollar in Iraq.”

Read MoreIran has until October to tighten anti-money laundering rules – FATF

Iraqi security officials, members of parliament and armed faction leaders told Arab News that most politicians and commanders associated with Iran, or who enjoyed its support, were “deeply concerned” as they believed they could be targeted by US Treasury sanctions at any time.

This has prompted them to withdraw their money from Iraqi banks and transfer it abroad to “minimize the damage.”

“The sanctions have deeply confused and concerned them,” a senior Iraqi national security official said.

“They began to withdraw their money from Iraqi banks and settle their financial assets with the Iraqi government to reduce the damage and avoid having their assets frozen and property seized in the event of sanctions.

- Advertisement -

“Our information suggests that they transfer most of the money to private companies in Dubai, and use some of it to buy property, both inside and outside Iraq.

“Actually, this is not new. They have been laundering their money for years, but what has happened now is that the sanctions have entangled them and forced them to change how they do it.”

MUST READ

Former Venezuelan national treasurer indicted in US for money laundering

Hugo Chávez’s former nurse has been charged with money laundering in a Miami federal court, accused of taking bribes from a billionaire media mogul...

Actress Lori Loughlin begins 2-month prison sentence for role in college admissions scam

Actress Lori Loughlin reported to a federal prison in Northern California on Friday to start a two-month sentence for her role in a massive...

FirstEnergy fires CEO, other executives over Ohio bribery scandal

FirstEnergy Corp. has fired its CEO amid multiple federal investigations related to an Ohio nuclear bailout law passed year. The Akron-based utility company announced in a...

Ukraine’s court strips critical power from anti-corruption agency

Ukraine's Constitutional Court has stripped the country’s anti-corruption agency of some of its critical powers. The high court’s ruling published on October 28 declared it...

Former South Korean President Lee Myung-bak sent back to prison for 17 years in corruption case

Former South Korean president Lee Myung-bak was ordered back to prison on Thursday (Oct 29) as the country's Supreme Court upheld a 17-year jail...

Subscribe For More

Get our daily notification on the latest financial crimes news around the World

Advertisement
Advertisement

Latest News

This Week

CEO of Serenity sober home gets 17 years in prison for health care fraud

The CEO/president of the Serenity Ranch Recovery network was sentenced to more than 17 years in prison Friday following a six-week trial in Fort Lauderdale federal...

Indonesia sentenced stockbroker to life over fraudulent investment scheme

Renowned stockbroker Benny Tjokrosaputro was sentenced to life by the Jakarta Anticorruption Court on Monday evening for his role in a major graft scandal...

Former Harris County deputy constable pleads guilty to transporting drug money and heroin

A former Harris County deputy constable and her husband pleaded guilty Wednesday to charges of conspiracy to possess with intent to distribute heroin, according...

Ukraine’s court strips critical power from anti-corruption agency

Ukraine's Constitutional Court has stripped the country’s anti-corruption agency of some of its critical powers. The high court’s ruling published on October 28 declared it...
Advertisement

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks