Posts Tagged ‘sanctions evasion’

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Iranian billionaire sanctions evader on trial

October 8, 2015

Even leaving aside the terrorist financing and sanctions evasion, Iran’s financial system is as clean as a sewer.  Assets unfrozen by the Iranian nuclear deal aren’t only at risk of being used for nefarious purposes, but are also at risk for theft, mismanagement, and to worsen the corruption of endemic to the Iranian regime and its associates abroad.  This trial in Turkey helps illustrate that point.  From Today’s Zaman:

Iran may confiscate Zanjani’s assets in Turkey-linked graft case

All assets belonging to Babak Zanjani — supposedly the richest businessman in Iran who also has alleged ties with the prime figure in Turkey‘s graft scandal — might be confiscated, as sought in the indictment of his trial, known as the biggest corruption case in Iran’s recent history.

The Turkish daily Hürriyet reported on Monday the third session of the first hearing into Zanjani’s trial, which started on Oct. 3, and cited the Tehran deputy chief prosecutor who continued to be the reader of the 237-page indictment following the first and second sessions that were held on Saturday and Sunday.

While referring to the charges against Zanjani — which are mainly charges of fraud, money laundering and corruption both within Iran and in several other countries, including in Turkey — the deputy chief prosecutor said, “I [therefore] demand the confiscation of all of the defendant’s assets in Iran and other countries, including those assets that have been fraudulently transferred to his associates, in the national interests of the Islamic Republic of Iran.”

Zanjani, believed to be the richest man in Iran who has reportedly $14 billion in assets, is known for helping the Iranian government evade the Western sanctions that were imposed on the country over its disputed nuclear program.

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Stashes and sanctions: suggested news reading

May 28, 2015
  • ISIS financier killed in raid; documents seized… more>>
  • Danish jihadists receive 400,000 crowns in welfare benefits, and counting… more>>
  • Iraq faced sanctions for years thanks to Saddam. Now it faces sanctions again thanks to an Iraqi airline helping Iran evade its sanctions… more>>
  • Spain busts up a Chinese money laundering operation that helps illustrate how “smurfing” works… more>>
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Lawsuit: sanctions evasion helped kill U.S. troops

November 30, 2014

Many of the attacks during the Iraq insurgency that left over 4,000 American troops dead were carried out by Sunni militants funded by and aligned with Al Qaeda, former members of Saddam Hussein’s regime, the Gulf monarchies, or combinations of all three. But a new lawsuit by veterans and the families of our war dead is pointing out that a lot of the killing of coalition forces also came from Shia terrorists trained and funded by Iran. Iran was able to fund the trainers of those terrorists partly because of Iran’s access at the time to the international financial system as allowed by major banks with branches in the U.S. despite the sanctions against Iran throughout the 2000s.

From Reuters earlier this month (h/t El Grillo):

U.S. veterans sue banks, claim they should pay for Iraq attacks

Wounded U.S. veterans and family members of U.S. soldiers killed in Iraq sued five European banks on Monday, seeking to hold them responsible for shootings and roadside bombings because they allegedly processed Iranian money that paid for the attacks.

The lawsuit filed in U.S. District Court in Brooklyn, New York, named Barclays Plc, Credit Suisse Group AG, HSBC Holdings Plc, Royal Bank of Scotland Group Plc and Standard Chartered.

Barclays, Credit Suisse, RBS and Standard Chartered declined to comment. HSBC did not respond to requests for comment.

The lawsuit was brought under the U.S. Anti-Terrorism Act, a 1992 law that permits victims to bring private suits against alleged financiers of militant operations.

The lawsuit alleges the banks conspired with Iranian banks to mask wire transactions in order to evade U.S. sanctions. The Iranian banks then funneled more than $100 million to militant groups that operated in Iraq at Iran’s direction, according to the suit.

The militant groups included a Shi’ite militia in Iraq, Kataib Hezbollah, as well as Quds Force, the overseas arm of Iran’s Islamic Revolutionary Guard Corps, the suit says.

Since 2009, the five banks have agreed to pay about $3.2 billion to the U.S. government to resolve allegations that they handled money in violation of sanctions against nations such as Iran, Libya and Cuba. All the banks signed deferred prosecution agreements with the U.S. Justice Department in addition to settlements with U.S. banking regulators…

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Financial sleight of hand: suggested news reading

June 19, 2014
  • The Palestinian Authority’s stipends to convicted terrorists are beginning to worry countries that give foreign aid.  One P.A. official’s solution?  Have the PLO pay the stipends instead through a bookkeeping trick… more>>
  • The president of the Western Australia Islamic Council pleads not guilty in $8 million methamphetamine case… more>>
  • Two writers tried setting up shell companies 4,000 times as research for a book. They were only asked for photo identification 20 percent of the time… more>>
  • Despite the Dutch company Fokker’s voluntary disclosure of violating sanctions by shipping aircraft parts to Sudan and Iran, their scheme was sufficiently purposeful and egregious to warrant criminal prosecution… more>>

 

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Nefarious finance: recommended reading

April 3, 2014
  • Back in each other’s arms:  Iran’s financial relationship with Hamas “has returned to what it was,” says Iran’s shura council… more>>
  • The pro-Hamas Islamic charity IHH  is hinting that it will launch another Turkish-based, Mavi Marmara-style “peace flotilla”… more>>
  • Al Qaeda in Iraq and Syria has its own revenue sources and doesn’t feel the need to answer to Ayman al-Zawahiri… more>>
  • Smuggling gold to keep Iran in the black?  Prosecutors uncover a sanctions evasion crime ring in Turkey that may go all the way to Prime Minister Erdogan’s office… more>>
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Tricky business in France: news roundup

March 9, 2014
  • BNP Paribas may have disguised transactions with Iran. A major settlement with the U.S. over the alleged sanctions violation may be in the offing… more>>
  • Credit Agricole and Societe Generale are under investigation by U.S. officials for helping Iran skirt sanctions too… more>> (h/t Sal)
  • During this current sanctions pause, delegates representing 120 French corporations have traveled to Tehran about potential business deals… more>>
  • U.S. regulators are concerned about France’s intentions to build satellites for the United Arab Emirates with U.S. components… more>>
  • French anti-money laundering regulator Tracfin finds that crime rings are increasingly reliant on bitcoin and other virtual curriencies… more>> (Fr)
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The money jihad: recommended reading

February 13, 2014
  • A senior Al Qaeda facilitator/financier in Iran is “more active than ever”… more>>
  • Sharia-compliant finance was concocted by the Muslim Brotherhood to undermine the Western financial system and establish the banking backbone of a neo-Caliphate, says the American Center for Democracy… more>>
  • Al Qaeda affiliates have more money than Al Qaeda Central. Time to rethink who’s calling the shots… more>>
  • Sen. Warner says that he knows from the intelligence community that what happened to Target shoppers in its credit card breach “happens daily to financial institutions”… more>>
  • Banks and businessmen should keep an eye on Turkey because it’s still helping Iran evade sanctionsmore>>
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Nuclear smugglers get slap on wrists

November 29, 2013

Germans sentence exporters to 4 years for trading with Iran

What is the penalty for sending nuclear components from Germany through third parties in what is being called “the largest violation of the trade embargo with Iran”?  Four years in prison.

Meanwhile, individuals who have violated international sanctions to places like Cuba and Iraq have faced equally long sentences for sending money or merchandise that is far less dangerous than what these men did.

From JN1 earlier this month:

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Bitcoin helps Iranian business evade sanctions

November 22, 2013

U.S. president on Iranian sanctions

Another loophole has materialized in Pres. Obama’s “toughest sanctions ever.”  Not that it really matters when we’re offering $20 to $50 billion in sanctions relief anyway if Iran agrees to scale back on its nuclear program somewhat.

By the way, if bitcoin can help businesses in Iran to skirt international sanctions, can’t bitcoin help Hezbollah as well?

From CoinDesk on Nov. 5:

Bitcoin helps Iranian shoe store overcome international trade sanctions

Jon Southurst

An interesting e-commerce site that went online just last week is accepting bitcoin only, because most overseas customers cannot pay with anything else.

The business is Persian Shoes, an over 70-year-old business selling handmade footwear. It is located in Isfahan, the third-largest city in Iran.

The owners are happy to ship anywhere, but paying them is a problem. Thanks to the vagaries of international diplomacy and the past few decades of history, the usual e-commerce channels are blocked.

Trade sanctions against the entire country of Iran by the United Nations, United States, European Union and others mean Western Union and major credit card companies will not deal with Iranian businesses, even those in the fashion world.

The only way to pay someone in Iran is with cash carried in your pocket – or some easily transferrable, mostly unregulated, digital currency.

The bitcoin-only store sold four pairs of shoes in its first day of business. “To my standards it is a good sale!” said the CEO, Mor Roghani. The store’s success continued throughout its first week.

“We have sold ten pairs of shoes so far using bitcoin. This is way above our expectations,” he added.

Persian Shoes is currently operated by three brothers, who are keen to expand the business their father started. Roghani’s cousin, who lives in Australia, introduced them to bitcoin and helped them to set up the site.

The site currently offers leather handbags, purses and shoes for women and seven varieties of shoes for men. Prices are all listed in USD and start around US $80.

Its FAQ page explains bitcoin and guides new users to online services like Coinbase, Bitstamp and BitBargain, as well as LocalBitcoins. It also explains the trade situation:

Our business is making and selling leather products. We like to sell our products across the world and the more customers the better. The problem is we operate in Iran and most payment systems either are not willing to serve us at all or impose a huge risk on our business. Before launching this website, our international sale has been limited to a few dedicated customers who knew about the quality of our products and were prepared to go through a lot of trouble to pay us! This of course, may sound incomprehensible for people who have all sorts of electronic payments at their disposal. However, before finding out about bitcoin, receiving our money was the number one obstacle in expanding our business.

As well as international trade restrictions, exchanging bitcoin back into local currency (Iranian Rials) also faces knowledge and technical barriers.

“Exchange is a bit tricky because bitcoin is not common yet. We are planing to hold onto some of the bitcoins and sell some at localbitcoins,” Roghani said. A lack of online shopping culture locally and poor internet connectivity hinders trade with other parts of Iran.

Depending on your country of citizenship or residence, you may not actually be allowed to buy these shoes even with bitcoin. Just as Americans may not spend a weekend in Havana or enjoy real Cuban cigars, they are also forbidden to engage in any trade activity with businesses or individuals located in Iran.

Despite this, Persian Shoes has taken orders from customers in the US and is waiting to see how smoothly the deliveries go before advertising the business more widely (update: all US orders have reached their destinations so far without problems.)

A query sent to United States Customs and Border Protection (part of the Department of Homeland Security) asking specifically about private e-commerce transactions for items of clothing received the following response: “Unfortunately, sanctions against Iran prohibit this”…

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Enforcement action news: recommended reading

October 30, 2013
  • A company in the United Arab Emirates that exported U.S. merchandise to Iran has been caught, fined, and slammed… more>>
  • A new ruling says that the Lebanese bank that funded Hezbollah through an account in New York can be sued by terror victims… more>>
  • The UN casually mentions that the latest addition to their sanctions list may have been involved in the attack in Benghazimore>>
  • Sanctions against Iran have done more damage to the Islamic Republic than anything since its war against Iraq, says a former spymaster… more>>

 

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Anatomy of an embargo buster

September 4, 2013

Step 1:  Let North Korean Air Force Gen. Yi Pyong-chol place an order for MiG-21s with the Castro brothers in Havana.

Step 2:  Hide 25 containers of jet fighter and anti-aircraft missile parts under 200,000 bags of Cuban sugar in the cargo hold of a North Korean bulk carrier.

Step 3:  Lie to the world by claiming, upon discovery of the smuggling attempt, that the aircraft were being sent to Pyongyang “to be repaired and returned to Cuba,” while the fighter jets are actually intended for end use in North Korea.

38 North has the details, which illustrate common state-sponsored sanctions evasion tactics:

Full Disclosure: Contents of North Korean Smuggling Ship Revealed

By Hugh Griffiths and Roope Siirtola

27 August 2013

All is seldom as it first appears in the world of North Korean sanctions busting. Six weeks after the inspection of the North Korean vessel Chong Chon Gang by Panamanian authorities on suspicion of drug trafficking, the full extent of the ship’s illicit military cargo falsely declared to be sugar and spare plastic sacks appears to have been much larger than previously reported. Moreover, key parts of the shipment seem intended for Pyongyang’s own use in its conventional military defenses, not to be repaired and returned to Cuba. Finally, the results of the search by Panamanian authorities provides new insight into North Korea’s illicit procurement priorities as well as evidence of its preferred maritime concealment methods and raises a host of still unanswered questions.

Undeclared Artillery and Small Arms Munitions Discovered

While initial media reporting suggested the seizure amounted to a few shipping containers with anti-aircraft missile components, two jet fighters and related engines, in fact a total of 25 shipping containers have now been recovered, together with six military vehicles. These were camouflaged at the bottom of five of the ship’s holds beneath about 200,000 bags of sugar, weighing approximately one hundred pounds each. This amount of sugar together with “two thousand empty polyethylene bags” were the only declared items listed in the cargo manifest signed by North Korean Captain Ri Yong Il.

A report compiled by various Panamanian authorities and the United Nations Organization on Drugs and Crime (UNODC) Container Control Programme (CCP) together with photographs of the seizure make clear that contrary to both the North Korean shipping declaration and Cuban government statements the shipment was without a doubt a violation of United Nations sanctions on North Korea.

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