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Financial
Action Task Force Urged to Re-Impose Countermeasures Against Iran
New York, NY - In an open
letter, United Against Nuclear Iran (UANI) Chairman Senator Joseph I.
Lieberman and other former government officials
called on the members of the Financial Action Task Force (FATF) to
re-impose effective countermeasures to stymie Iran's financing of
terrorism and money laundering at their meetings in Paris, February
18-23.
In addition to Senator Lieberman,
the letter was signed by UANI CEO Ambassador Mark D. Wallace, former
U.S. Homeland Security Advisor Frances Townsend, Governor Jeb
Bush, Governor Bill Richardson, former Acting Director
of the CIA Michael Morell, former Deputy Director of the CIA
and Under Secretary of the Treasury for Financial Intelligence and
Terrorism David S. Cohen, former Foreign Minister of Italy
Giulio Terzi, and former Foreign Minister of Poland Radoslaw
Sikorski, among others.
"While the Rouhani
administration has made nominal efforts to bring Iran into compliance
with international banking standards, Tehran's actions speak louder
than its words," the letter states, referring to reported or
known financing by the Iranian government of terrorist groups
Hezbollah, Hamas, and Islamic Jihad.
"Weakening the standards for
Iran - particularly Tehran's attempt to carve out an exemption for
Hezbollah as a 'liberation organization' - sends a message that the
FATF is eroding the standards for AML/CFT more generally," the
letter continues.
From February 18 to the 23, the
FATF will be holding Plenary and Working Group meetings in Paris,
France. The organization is an inter-governmental body whose main
objective is to set standards and promote effective implementation of
legal, regulatory and operational measures for combating money
laundering, terrorist financing and other related threats to the
integrity of the international financial system.
In addition to the letter, a
message to the FATF is also running in the Financial Times. A
copy of the ad can be found here.
The full text of the letter, along with
the signatories, follows:
Dear Mr.
President:
February 16,
2018
We applaud the Financial Action Task Force (FATF) for
the critical role it plays in countering threats to the integrity of
the international financial system. As you gather in Paris on
February 18-23, we urge the FATF to re-impose effective
countermeasures to stymie Iranian money laundering and financing of
terrorism.
We endorse the
FATF's determination, reached in November 2017, that the terror-
financing risk posed by Iran was sufficiently concerning to warrant
urging all members to apply enhanced due diligence to any business
dealings with that country. However, the Iranian regime's failure to
address anti-money laundering/combatting the financing of terrorism
(AML/CFT) deficiencies continues to damage the integrity of the
international financial system. Consequently, countermeasures should
be re-imposed against the Islamic Republic. Until and unless the
regime's banks meet international AML/CFT standards, no financial
institution can afford the risk of doing business with Iran.
Specifically,
Iran has demonstrated in word and deed that it does not respect the
FATF. This past summer, after the FATF's plenary meeting in Valencia
suspended counter-measures against Iran, the Iranian Ministry of
Economic Affairs and Finance issued a statement accusing reputable
FATF members in good standing of thwarting efforts to improve its
ranking "without technical logic and strictly based on political
bias." Iran lodged this complaint even though the FATF operates
by consensus based on verifiable facts, and not conspiracy theories
routinely deployed by Iran's propaganda arms.
While the
Rouhani administration has made nominal efforts to bring Iran into
compliance with international banking standards, Tehran's actions
speak louder than its words. The Islamic Revolutionary Guard Corps
(IRGC), a sanctioned terrorist organization that has enabled the
Assad regime's barrel bombing of thousands of innocent civilians, is
slated to receive increased funding of $8 billion under the Iranian
regime's proposed budget for the next fiscal year.
That's alongside
an influx of funds in the draft financial plan for FY 2018-19 to
religious foundations, which have been sources of financing for
Iran's terror proxy, Hezbollah. The Financial Times found that
"31.1trn rials ($853m) [have been] proposed for about a dozen
institutions that promote Islam and the ideological foundations of
the Islamic regime." That represents an increase of 9% compared
to the previous year. Two major Iranian foundations reportedly fund
Hezbollah: (1) Bonyad-e Mostazafen ve Janbazan (Foundation for the
Oppressed and Disabled), which is reportedly Iran's largest company
behind the state-owned National Iranian Oil Co., and (2) the Shrine
of Imam Reza Foundation, reportedly Iran's largest landowner.
Hezbollah also receives funds directly from Iranian Supreme Leader
Ayatollah Ali Khamenei's solely-controlled personal budget, which
exists outside of the Iranian state. It is not included in the public
budget but financed from various religious associations, oil
resources, and other entities in Iran, and is not subject to
independent oversight. By Hezbollah Secretary General Hassan
Nasrallah's own admission, Khamenei gave the group $300 million for
postwar compensation after the 2006 war with Israel.
Hezbollah is not
the only terror group that benefits from Tehran's generosity. Reports
indicate the head of Iran's Qods Force-the IRGC's foreign operations
unit, which the U.S. Treasury Department designated in 2007 as a
terrorist supporter of the Taliban-placed calls to the leaders of the
military wings of Hamas and Islamic Jihad, which are themselves
internationally sanctioned terrorist organizations, pledging renewed
military assistance after President Trump's announcement on the
status of Jerusalem in December 2017. That's not to mention an
Iranian drone violating Israeli airspace on February 10 after being
launched from Syria's Tiyas Military Airbase, which has been used by
the Qods Force for months for the purposes of transferring weaponry
to be used against Israel.
In addition to
terrorist financing, money laundering is rampant in Iran. For sound
reasons, the United States continues to designate the entire Iranian
financial sector as a jurisdiction of primary money laundering
concern under Section 311 of the USA PATRIOT Act and under the 2012
National Defense Authorization Act. Iranian financial institutions
are notorious for actively facilitating or turning a blind eye to
money laundering. For example, the U.S. Department of the Treasury
has found that "Iran is known to have used state-owned banks to
facilitate terrorist financing." For example, Bank Saderat in
2001-2006 transferred "$50 million from the Central Bank of Iran
through its subsidiary in London to its branch in Beirut for the
benefit of H[ezbollah] fronts in Lebanon that support acts of
violence." Bank Melli is another Iranian state-owned bank that
funds Hezbollah, with the Treasury Department alleging that it
provided money to the Shiite group through its funding of the Qods
Force. The preeminent Basel Institute on Governance ranks Iran last
out of 146 countries in its 2017 Basel Anti-Money Laundering (AML)
index, meaning money-laundering and terrorist financing is most
rampant there.
Further, Iran's
IRGC permeates wide swaths of the Iranian economy and government. It
retains control over large-scale projects in Iran, including, inter
alia, the automobile, energy, civil engineering, manufacturing,
shipping, and telecommunications sectors. Doing business in Iran
without also doing business with the IRGC is nearly impossible. This
risk is amplified by the IRGC's routine use of extensive networks of
front and shell companies that mask its involvement.
It is within this context
of structural opacity, unaccountability, corruption, and mismanagement
that Iran's most recent popular protests enveloped the country. The
$8 billion proposed to be budgeted to the IRGC was one of the
specific complaints identified by protesters. Weakening the standards
for Iran-particularly Tehran's attempt to carve out an exemption for
Hezbollah as a "liberation organization"-sends a message
that the FATF is eroding the standards for AML/CFT more generally.
Accordingly, we urge the FATF during its February meeting to stand
with the Iranian people and re-impose counter-measures against Iran
until it verifiably ceases support for terrorism. Such action would
protect the international financial system from the ongoing risks
presented by Iran's structural AML/CFT deficiencies.
Likewise, we encourage
jurisdictional authorities to heed these risks through clear
direction to their markets and financial institutions. We also call
on global markets and private financial institutions, which have
recognized and guarded against the risks posed by Iran's illicit
activities, to continue to exercise vigilance and ensure that Iran
only be allowed back into the global economy and international
financial system after fundamentally changing its extremist, illegal,
and destabilizing behavior.
Thank you for your consideration and for your continued good work to
protect the international financial system.
Sincerely,
Senator Joseph I. Lieberman
Former U.S. Senator (I-CT)
Chairman of United Against
Nuclear Iran
Ambassador Mark D. Wallace
Former U.S. Ambassador to
the United Nations for Management and Reform
CEO of United Against
Nuclear Iran
Frances Townsend
Former U.S. Homeland
Security Advisor
Michael Morell
Former Acting Director and
Deputy Director of the U.S. Central Intelligence Agency
David S. Cohen
Former Deputy Director of
the U.S. Central Intelligence Agency and Under Secretary of the
Treasury for Terrorism and Financial Intelligence
Governor Bill Richardson
Former Governor of New
Mexico and U.S. Secretary of Energy
Governor Jeb Bush
Former Governor of Florida
Ambassador John Bolton
Former U.S. Ambassador to
the United Nations
Senator Norm Coleman
Former U.S. Senator (R-MN)
Senator Mark S. Kirk
Former U.S. Senator (R-IL)
Ambassador Giulio Terzi
Former Foreign Minister of
Italy
Ambassador Radoslaw Sikorski
Former Foreign Minister of
Poland
Dr. August Hanning
Former Director of the
Federal Intelligence Service of Germany (BND)
Lt. Gen. Sir Graeme Lamb
Former Director of the UK
Special Forces Former Commander of the British Field Army
Ambassador Dennis B. Ross
Former Special Assistant to
the President and Senior Director for the Central Asia Region at the
U.S. National Security Council
Elliott Abrams
Former U.S. Deputy National
Security Advisor for Global Democracy Strategy
Norman T. Roule
Former U.S. National
Intelligence Manager for Iran
Ambassador Cresencio Arcos
Former Assistant Secretary
and Director of International Affairs at the U.S. Department of
Homeland Security
Lt. Gen. (ret.) Michael D.
Barbero
Former Director of the U.S.
Joint Improvised Explosive Device Defeat Organization
Barry Rosen
Survivor of the 1979 Iran
Hostage Crisis
Ambassador Mark P. Lagon
Former U.S.
Ambassador-At-Large and Director of the Office to Monitor and Combat
Trafficking in Persons at the U.S. Department of State
Ambassador Joseph M.
Torsella
State Treasurer for the
Commonwealth of Pennsylvania
Former U.S. Ambassador to
the United Nations for Management and Reform
Ray Takeyh
Hasib J. Sabbagh Senior
Fellow at the Council on Foreign Relations
Former Senior Advisor on
Iran at the U.S. Department of State
Dr. Michael Makovsky
President and CEO of the
Jewish Institute for the National Security of America
For more information, or to speak
with UANI leadership, please contact: press@uani.com.
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