Money Laundering is Widespread in Iran, Says Foreign Minister Zarif


Kayhan London, November 14: Iran’s Foreign Minister Mohammad Javad Zarif has publicly acknowledged that some individuals in Iran have benefited from money-laundering schemes.

Speaking to Khabar Online news agency (https://www.khabaronline.ir/), Mr. Zarif said: “Some groups have greater financial resources than the Foreign Ministry, which enables them to conceal the transformation of billions of tomans into ostensibly legitimate assets. They prevent us from joining the Financial Action Task Force on Money Laundering (FATF),” an intergovernmental organization founded in 1989 to combat money laundering.”

“These entities have the financial strength to spend hundreds of billions of tomans campaigning against the FATF. They can profit $7.15 billion from a single transaction,” Mr. Zarif explained. “The Foreign Ministry’s entire budget is $262 million. We cannot, therefore, compete with many cultural institutions which have close links to the country’s powerful organs.”

While many were surprised by Zarif’s candid remarks about the widespread money laundering activities within the regime, opponents of President Hassan Rouhani’s government were quick to lambaste the foreign minister’s assertions.

Ahmad Amirabadi, a conservative Majlis (Iranian Parliament) deputy representing Qom, said: “Comments about widespread money laundering activities in Iran are a serious insult to the [Islamic Republic] system.” He added: “Money laundering occurs in banks. He [Zarif] is on the same committee as the governor of the Central Bank of the Islamic Republic of Iran [Abdolnaser Hemmati] and the Minister of Economic Affairs and Finance [Farhad Dejpasand]; therefore, the cabinet [as a whole] should be held accountable.”

Enlarge

zarif-poolshoei-696x391
Zarif. Source: Kayhan London

Mr. Amirabadi added: “Why hasn’t Mr. Zarif mentioned this issue before, given that he has appeared in the Majlis more than 15 times responding to 73 of our questions? Why has he chosen to discuss this in an interview instead?”

President Rouhani’s cabinet believes that joining the FATF would improve Iran’s relationship with European countries. However, ultra-conservative factions within the regime vehemently oppose the idea. Foreign Minister Zarif’s comments have given ammunition to right-wing elements to attack the government.

In an open letter dated November 13, a group of financial experts also criticized Zarif over his comments.

In an editorial titled “Mr. Zarif, Are You Aware That…?”, the managing editor of the hardline Tehran-based daily Kayhan, Hossein Shariatmadari, said: “Why do you accuse Islamic Iran of laundering money on a large scale while the U.S. and the Europeans are pressuring us to join the FATF?” He added: “You’ve claimed that billions of tomans are laundered in Iran and that a person or persons have profited $7.15 billion from a single transaction. Why haven’t you then reported these people to the Judiciary? If there is any truth in what you’ve claimed, then your refusal to report them to the authorities makes you an accomplice in the money-laundering scheme, and amounts to a dereliction of duty and treason. Does it not?”

Mr. Shariatmadari noted: “The president has repeatedly said that one of the main aims of his government has been to tackle the money-laundering issue in the country. Don’t you trust the president enough to let him know who these people are?”

Another conservative Majlis deputy, Mousavi Laregani, said: “Mr. Zarif’s remarks call into question the government’s measures to combat money laundering. The foreign minister’s comments about the widespread money- laundering problem inside the country and the FATF is not logical. Some people are trying to blame others for their incompetence.” 

Meanwhile, those in the reformist camp have rushed to defend the foreign minister. Alireza Rahimi, a deputy representing Tehran, Ray, Shemiranat, and Eslamshahr tweeted: “Many people are against amending the money laundering law and punishing the culprits. They are offended by the bitter truth, and respond by insulting Mr. Zarif. It is imperative that we tackle the problem of money laundering.”

Abdolreza Hashemzaei, another reformist deputy representing Tehran, Ray, Shemiranat, and Eslamshahr, said: “The signing of the Joint Comprehensive Plan of Action (JCPOA), better known as the Iran nuclear deal, has unraveled the international coalition which was headed by the U.S. against Iran. All senior officials in the country know this to be true. The fact that an ignorant person in the U.S. decided to withdraw from the deal doesn’t discredit the JCPOA or its core principles.”

Mr. Hashemzaei added: “I don’t understand why the conservative media have responded in such a negative way. Maybe they don’t know the meaning of money laundering. We must explain to them that FATF doesn’t just include terrorism but also the trafficking of illegal goods. We’d heard that smugglers were keeping close to $7.2 million in our banks. These people wouldn’t be able to continue with their illegal activities if we were to become a member of FATF. In developed countries, one must disclose the source of any bank deposit greater than $10,000.”

Enlarge

Irans_10th_parliament_inaugural_celebration_19
Iran's Majlis.

In a closed session on September 23, the Majlis passed the Countering the Financing of Terrorism (CFT) bill, which is a component of the FATF. The conservative factions, however, strongly opposed the measure. On November 8, the spokesman for the Guardian Council announced that the council had rejected the bill.

Addressing a group of Majlis deputies on May 22, Iran’s Supreme Leader Ayatollah Ali Khamenei said that there was no need for the Islamic Republic to ratify the CFT bill. He called on the Majlis to draft other laws to combat money laundering.


Translated from Persian by Fardine Hamidi