In recent times, the Iranian regime has found itself in the global spotlight for reasons that extend beyond its geopolitical engagements. Amidst the political landscape, a darker undercurrent has been steadily gaining attention—the pervasive issue of corruption and its intimate tie to money laundering. This complex web of illicit financial activities has been alleged to fuel not just personal enrichment but also serve as a means to support terrorism on an international scale.
The Iranian regime’s apparent involvement in money laundering schemes has cast a shadow over its financial integrity. Despite international efforts to combat money laundering and curb the funding of terrorism, Iran’s alleged association with these practices raises critical questions about its commitment to global stability. From the manipulation of financial systems to evade sanctions to allegations of illicitly funding extremist groups, the regime’s actions have prompted concerns on a global scale.
On Tuesday, August 21, Zabihollah Khodaian, the head of the General Inspection Organization, expressed his concerns during the inaugural conference titled ‘Combating Money Laundering and Financing Terrorism’. This event, in the presence of the regime’s Minister of Economy, shed light on the challenges the Inspection Organization faces in implementing intelligent supervision, primarily due to resistance from officials and government representatives.
Khodaian highlighted the deteriorating situation of money laundering in Iran. He pointed out that the Inspection Organization, the Audit Bureau, and the Ministry of Intelligence aren’t prohibited from employing intelligent monitoring methods for overseeing the nation’s financial transactions.
Acknowledging substantial evidence of extensive money laundering within the regime, Khodaian, a senior supervisory official, underscored the involvement of entities and individuals in illicit profits through various criminal activities such as human trafficking, embezzlement, and the trade of drugs and weapons.
These groups, as Khodaian observed, exhibit high levels of intelligence, possessing intricate knowledge about the banking and legal systems. He emphasized that even so-called ‘white-collar individuals’ collaborate with these groups, indicating their complexity beyond ordinary citizens.
Khodaian pointed to the real estate market and bank deposits as attractive avenues for money laundering. He highlighted that an opaque and unhealthy economy with underground sectors easily becomes a breeding ground for the proceeds of money laundering.
Iran’s economic conditions, Khodaian asserted, strongly indicate the presence of money laundering, leading to the weakening of the private sector. He attributed the sudden spikes in gold coin, dollar, and housing prices to this situation. Interestingly, experts and insiders of the coin and currency market note that major players in these markets over the years have been the regime’s main economic and financial institutions mostly under the supervision of the regime’s supreme leader Ali Khamenei and the regime’s main economic cartel the Revolutionary Guards (IRGC).
In Iran, only economic entities associated with this group can hinder the supervision of the Audit and Organization Court, thereby enabling comprehensive inspection across the country.
The inaugural ‘Combating Money Laundering and Financing Terrorism’ conference coincided with Iran’s notoriety for its support of terrorism, evident in its backing of militant groups in the Middle East, provision of weaponry, financial resources, and organized smuggling of goods and drugs. This support contributes to the regime’s absence from the Palermo Convention and the failure of FATF bills to gain approval from the Expediency Council.
Following the Joint Comprehensive Plan of Action (JCPOA) agreement in Hassan Rouhani’s administration, on June 20, 2018, Ali Khamenei preemptively stressed the parliament’s independent role in legislating against terrorism and money laundering.
Although on October 7, 2018, the parliament approved Iran’s participation in the CFT, only two of four FATF bills—the ‘Amendment of the Anti-Terrorism Law’ and the ‘Amendment of the Anti-Money Laundering Law’—received approval from the Guardian Council. The bills ‘Joining Iran rejected the Palermo Convention’ and ‘Iran’s accession to the CFT’ were deferred to the resolution committee. Majlis members believed that their approval might unveil strategies for evading sanctions.
It should be noted that high-ranking IRGC and Quds Force leaders oppose the bill’s approval, fearing disclosure of their financial structures and potential repercussions on their ability to fund proxy groups and engage in extensive money laundering.
On June 24, 2023, the Financial Action Task Force (FATF) retained Iran on its blacklist, urging member nations to subject Iranian entities to enhanced scrutiny in financial, commercial, and banking relations. The FATF attributed this decision to Iran’s endorsement but non-implementation of the Palermo and CFT conventions.
Despite the regime’s need to improve financial transparency to be removed from the FATF blacklist, the fate of these bills appears to be influenced by factors beyond the government entities and the Expediency Council. Unidentified groups have determined the destiny of these bills, turning Iran into a global haven for money laundering, as lamented by Zabihollah Khodaian.
