Iran will continue to fund terror abroad despite laundering regulations
February 6, 2020, 11:22 am

Iran will continue to fund terror abroad despite laundering regulations

Financial regulations will not stop Iran illicitly funding terrorist militant groups abroad, said experts, as the deadline for Iran to comply by global money laundering rules approaches this month.

Iran’s President Hassan Rouhani has called for Tehran to stick to rules set by the Paris-based global finance watchdog Financial Action Task Force (FATF), an unpopular move with some senior Iranian authorities, to protect ties between the sanctions-hit country and international banks.

Rouhani supports currently unpassed laws that would bring Iran into FATF compliance. But experts say that even if these laws pass, it would not stop the regime from funding regional terror.

“Tehran has carved out exceptions in the bills which allow Tehran to continue what it has been doing … The bills have created loopholes for Tehran to continue funding terrorism and bypass sanctions,” said Saeed Ghasseminejad, a senior Iran and financial economics adviser at the Foundation for Defense of Democracies (FDD).

Last month the Iranian parliament passed a domestic law ostensibly aimed at curbing money laundering which in fact had a loophole that allowed account holders to obscure their identity, allowing sanctioned individuals and companies to conceal themselves.

This law is the latest example of how the regime continues to defy sanctions, international norms, and laws on money laundering and terrorism financing.

Money laundering and sanctions

Authorities have increasingly turned to money laundering as sanctions have devastated the Iranian economy. Last month the Institute of International Finance (IFF) estimated that the economy will fall into an even deeper recession, contracting 7.2 percent for the current financial year.

US sanctions have hit the country’s oil sector particularly hard. Crude oil exports have dropped over 85 percent in recent months to 0.4 million barrels per day (bpd) in recent months, down from highs of 2.8 million bpd in May 2019. These figures are based on official numbers, which may understate exports as Iranian authorities have repeatedly sought to illegally export oil and avoid sanctions.

The US special representative for Iran, Brian Hook, told Al Arabiya last year that oil sanctions on Iran alone will deny the regime $50 billion dollars in revenue annually.

In this context, the country has increased money laundering activities in a bid to avoid sanctions. In November, Foreign Minister Mohammad Javad Zarif said that money laundering in Iran amounts to billions of dollars.

Experts pointed out that this Iranian money laundering is far from new.

“The Islamic Republic government agencies have historically engaged in money laundering in order to finance its non-state allies and proxies outside of Iran,” said Ali Alfoneh, senior fellow at the Arab Gulf States Institute in Washington.

Iran’s ability to take advantage of the legitimate financial system, coupled with a control of plethora of black-market actors, has permitted Iran to underwrite terror and aggression worldwide, added Behnam Ben Taleblu, a senior fellow at the FDD.

“That is how a country a myriad of financial problems remains the world’s foremost state sponsor of terror,” he said.

Rouhani and Khamenei split on FATF compliance

Iran’s rulers are divided on the issue, despite foreign businesses saying that compliance with FATF is vital for Tehran to attract investors and avoid US penalties.

Iranian President Rouhani last week said Tehran should stick to the FATF rules, but senior clerics have stalled the passing of key bills.

“Our national interests should not be ignored, and we should not let Trump and those terrorists in the White House cut Iran’s relationship with international Banks,” said Rouhani.

Iran’s parliament has passed four bills required by FATF. However, two of the bills have been held up by Iran’s legislative Guardian Council and advisory Expediency Council, despite initial approval by lawmakers.

A member of the Expediency Council said in January that the council has rejected the Combating the Financing of Terrorism (CFT) bill, which would link Iran to Palermo and Terrorist Financing Conventions aimed at curbing transnational illicit financing.

These councils’ opposition to the laws is influenced by Iran’s Supreme Leader Ali Khamenei, who has yet to make a public decision on their adoption, said experts.

“It is not a foregone conclusion that Supreme Leader Ali Khamenei will give his blessing to ratifying the Palermo Convention. If he does not, then the Expediency Council is highly unlikely to do so, whether now or later,” said John Calabrese, Scholar in Residence at the Middle East Institute, where he is director of the institute’s project on The Middle East and Asia.

The council’s deadline to approve the CFT bill had ended, Iranian politician Ahmad Tavakoli told Iran’s semi-official ISNA news agency, adding that the deadline will not be extended and that the case has been closed. 

This opposition to complying by money laundering norms is unlikely to disappear, according to experts.

“This indicates a cognizance by some elites of how essential Iran’s bad business practices are to the regime,” Taleblu concluded. 

SOURCE : Al Arabiya English

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BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).

Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.