VIENNA - Austria on Tuesday dismissed as "unfounded" allegations by an Iranian exile group that the Islamic Republic may be using banks in the European Union member state to help it avoid international sanctions.

The People's Mujahideen Organisation of Iran (PMOI) - which the United States in September removed from its official list of terrorist organisations - said Austria was among countries "that the regime has chosen to skirt sanctions" in Europe.

It said the head of an Iranian government agency seeking ways around punitive measures on Tehran had been working with Iran's "lobby network in Austria in various fields for more than eight years and has set up a widespread network".

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