UN: Iran buying foreign banks to sidestep sanctions

Leaked report by the UNSC says Iran is circumventing sanctions through foreign money-exchange bureaus and banks.

By YAAKOV KATZ
UN Security Council_311 (photo credit: Reuters)
UN Security Council_311
(photo credit: Reuters)
Iran is trying to purchase foreign banks and money-exchange bureaus around the world in an effort to circumvent sanctions aimed at preventing the delivery of nuclear and missile components to it, according to a report prepared for the UN Security Council.
The report was submitted three weeks ago to the Security Council by the UN Panel of Experts, a group that monitors compliance with UN sanctions imposed on Iran.
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The report was leaked to the Internet and obtained by a number of leading Israeli-defense analysts.
The report found that Iran often uses money-exchange bureaus overseas to transfer money to, and then has it converted into dollars or euros.
The bureau then transfers the money to an intermediary bank – in places like Dubai and Turkey – and then to a bank in the manufacturer’s country.
“The end-user’s name does not appear on the transaction, so the ultimate recipient of funds is not aware they are coming from a sanctioned entity,” the report explained.
The experts also warned that Iran is attempting to build covert financial infrastructures to facilitate the deals it requires to continue its nuclear and ballistic missile programs.
One country told the panel that Iran has made 10 different attempts to buy foreign banks since 2009, and has also tried setting up banking institutions in parts of South America.
To transfer the equipment purchased, Iran uses its fleet of cargo freighters, controlled by the stateowned IRISL shipping company.
The report revealed that between late 2008 and mid-2010, 76 out of 123 of IRISL’s vessels were renamed with many of the Farsi names replaced by English ones, and in some cases with new paint jobs. In addition, as of 2010, more than 70 percent of Iranian-owned vessels were registered in Malta, a wellknown flag of convenience.
The report urges the Security Council to enforce rigorous end-user checks and vigilance to the risk of re-export on the part of all exporters.
It stated that Iranian agents were already buying items that do not correspond with Iran’s current needs, out of concern that it will run into shortages in the future.