Monday, February 19, 2018

Financial Action Task Force Urged to Re-Impose Countermeasures Against Iran





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FOR IMMEDIATE RELEASE
FEBRUARY 19, 2018
press@uani.com
                                       
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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United Against Nuclear Iran (UANI) is a global advocacy group whose mission is to highlight the danger of the Iranian regime to the international community. UANI was founded in 2008 by Ambassador Mark D. Wallace, the late Ambassaor Richard Holbrooke, and Middle East expert Ambassador Dennis Ross, and is led by a diverse Advisory Board of policy experts and former government officials. UANI works to ensure the economic and diplomatic isolation of the Iranian regime in order to compel Iran to abandon its illegal nuclear weapons program, support for terrorism, and human rights violations. To learn more about UANI, please visit: https://www.unitedagainstnucleariran.com/

American Coalition Against Nuclear Iran, P.O. Box 1028, New York, NY 10185-1028







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