US, Iraq Coordinate Moves Against Money Laundering Benefiting Iran
US officials have discussed banking and money laundering issues related to Iran with a high-ranking Iraqi delegation that visited Washington this week.
US officials have discussed banking and money laundering issues related to Iran with a high-ranking Iraqi delegation that visited Washington this week.
Deputy Prime Minister and Foreign Minister of Iraq, Fuad Hussein accompanied by Central Bank Of Iraq Governor Ali al-Allaq met with both the State Department and with Treasury to discuss a host of economic issues. But an urgent issue was how to prevent Iran from using Iraq’s banking ties with the United States to launder US dollars and circumvent Washington’s sanctions.
The outcome of the talks on this specific issue are not clear yet, but a statement from the US Department of the Treasury made it clear that the problem was among the main topics discussed.
The Treasury said that the two sides discussed the Iraqi “government’s plans for economic and financial sector reforms and a mutual commitment to anti-money laundering and countering the financing of terrorism (AML/CFT) measures.”
In January, Iraq’s currency fell substantially against the US dollar leading to reports that US banks had instituted tougher review of transactions originating from Iraqi banks, leading to a shortage of dollars in Iraq.
The Associated Press reported that the move was triggered a couple of months before to stamp out what Iraqi officials describe as rampant money laundering that benefits Tehran and Damascus which are under US sanctions.
According to information received by Iran International in early February, Iran’s Revolutionary Guard and the Islamic Republic’s embassy in Iraq are involved in the money laundering operations that aim to funnel the regime’s revenues from oil and gas exports back to Iran. As per a repeatedly extended sanctions’ waiver by Washington, Tehran is only allowed to import medicine and some essential goods in exchange for its exports of gas and electricity to its neighboring country.
According to a report by London-based newspaper Asharq Al-Awsat, the decline in the value of Iraq’s dinar and the accompanying price increases for foodstuffs and imported goods can be traced back to a remarkable change in the policy adopted by the US Treasury and the Federal Reserve Bank of New York.
To what extent these issue were resolved during the Iraqi delegation’s visit to Washington is not clear, but banking reforms were mentioned in statements and that shows this was a key topic in the discussions.
Iran is apparently facing a serious shortage of foreign currencies. Its currency, the rial, has fallen by 50 percent in the past years and now stands at a historic low of 500,000 rials to one US dollar.
Despite tougher implementation of US banking regulations by the Treasury, the tone of US officials was extremely deferential and respectful of the Iraqi government. State Department Spokesperson Ned Price during his briefing on February 9 described bilateral relations as one of close partners.
“Our relationship with the Government of Iraq is one based on partnership. It is one based on mutual respect. It is based on our mutual interests and what works to the benefit of both of our countries. It is not our approach…to issue demands, to issue decrees. When we engage with our Iraqi partners, we do often talk about the challenges that we confront in the region and well beyond. Many of those challenges are challenges to both of our interests. Iranian-backed forces in some cases pose a challenge to both of our interests,” Price told reporters.
In a statement on Thursday, members of several groups in the European Parliament and national parliaments called on European countries to boycott the ceremonies, and stand in solidarity with “the Iranian people who are fighting for their rights.”
Weeks before the anniversary of Islamic Republic’s establishment, a campaign was launched to boycott the regime’s ceremonies over the violent crackdown on nationwide protests sparked by the death in custody of Iranian Kurdish 22-year-old woman Mahsa Amini.
“We, cross-party Members of the European Parliament and Members of national parliaments, are urging the governments of the EU member states and the European External Action Service to boycott tomorrow's ceremony in Tehran for the anniversary of the Islamic revolution that brought this brutal regime to power. Likewise, EU officials ought to stay away from any such regime celebrations in Iranian embassies abroad,” read the statement.
The Islamic Republic government organizes 10 days of celebrations known as Fajr – literally meaning dawn – but the final day, February 11, is the most important one, in which the regime heavily invests. It already held an event on Thursday with a group of foreign ambassadors to the Islamic Republic with President Ebrahim Raisi in attendance. The government did not release the list of the participants but according to some reports envoys from European countries did not participate in the event – except for Hungary and Poland.
Dismayed by a lack of participation of Western envoys, Raisi said during the event that “The US and the three European countries [that are signatories to the 2015 nuclear deal] were caught up in a state of delusion and made miscalculations” by “meddling in Iran’s domestic affairs,” referring to the ongoing uprising.
Hailing the unanimity of European countries, US Senator Bob Menendez, Chairman of the Senate Foreign Relations Committee, tweeted, “Glad to see broad EU consensus against Islamic Revolution Day in Tehran, except from Orban’s Hungary, which all too regularly embraces autocrats, and Poland, whose silence is disappointing.”
“Nobody should be celebrating a regime with this much blood on its hands,” he added.
The statement by the MEPs added that “Over the past 44 years, the Islamic Republic has murdered tens of thousands of Iranians and has spread terror, misery and war throughout the region and beyond. Together with the Assad regime and Russia, the regime in Iran has carried out horrific war crimes in a conflict that has killed over 500,000 Syrians.”
The statement drew attention to the fact that hundreds of protesters have been killed, “for the 'crime' of demanding freedom, democracy and dignity and above all equal rights for women. Women and even young girls are being harassed, arrested, tortured, raped and murdered for simply refusing to wear the hijab or just for not fully covering their hair. At least 100 Iranians are facing the death penalty over their participation in protests following sham trials where the accused had just 15 minutes to defend themselves.”
Touching upon the growing military ties between Iran and Russia, the statement warned that “Tehran is now intensifying its growing alliance with Russia by supplying Moscow with Kamikaze drones designed to terrorize the Ukrainian people and to destroy their critical infrastructure.”
The MEPs said that celebrating “the rise to power of this odious regime” by European politicians and ambassadors -- even low-ranking diplomats -- would be “an inexcusable violation of our own values and a betrayal of the Iranian people as well as the regime's countless victims in the region and in Ukraine.
“Any official European participation in these celebrations would play into the hands of the Islamic Republic,” they said, adding that the mullahs would like nothing more than to demonstrate that despite their repression of the protests, it is "back to business as usual" with the EU.
In addition to President Biden, the letter was also addressed to Secretary of State Antony Blinken, Treasury Secretary Janet Yellen, and Secretary of Commerce Gina Raimondo and was signed by about 60 members of the US House of Representatives.
The letter is in line with earlier efforts by Western countries seeking to restrict the Islamic Republic’s access to parts used in building drones that Russia uses to attack Ukraine.
Voicing their deep concern, the lawmakers urge the Biden administration “to develop a coordinated, whole-of-government approach to interrupt Iran’s supply chains, shut down shell companies used by adversaries to evade sanctions, and pressure allies to crack down on unscrupulous distributors in Europe and Asia.”
They also called for “a timely briefing on any progress that has been made and plans going forward” about Washington’s efforts to curb the supply of drone parts.
“Iran has provided hundreds of drones to Russia since August 2022. The Shahed-136 and Shahed-131, one-way attack unmanned aerial vehicles also known as “suicide drones,” have terrorized Ukrainian civilians since their introduction into the conflict. Iran has also delivered to Russia the Mohajer-6, a surveillance drone capable of conducting precision air-to-ground strikes,” the letter read.
Conflict Armament Research investigations revealed that processors built by Dallas-based technology company Texas Instruments as well as engines made by Austrian firm owned by Canada’s Bombardier Recreational Products have been used in the drones.
Many parts are considered dual-use components and relatively easy to buy, without any approval needed.
The representatives referred to the report by Conflict Armament Research that studied more than 500 components from Iranian-made drones and unexploded precision-guided munitions that were recovered in Ukraine, determining that “82 percent of their parts were manufactured by companies based in the United States.” Ukrainian intelligence services have estimated that 75 percent of the components of Iranian-made drones deployed in the conflict are US-made.
The signatories also mentioned the punitive measures taken by the Office of Foreign Assets Control on firms involved in the production and delivery of Iranian drones to Russia, describing the sanctions as “a small but promising first step in what must become a concentrated, sustained effort.”
“Just as the United States and its international allies rallied to implement a comprehensive sanctions regime to combat Iran’s ballistic missile program, it must do the same to degrade the regime’s precision-strike capabilities,” they urged.
They said Tehran’s fleet of drones have far-reaching implications beyond the war against Ukraine as such weapons “provide Iran and its proxies with yet another tool to project power in the region, threatening our troops, key allies, and freedom of navigation.”
Stressing the necessity of immediate action, they said the US should move not only to disrupt Iran’s burgeoning relationship with Russia, but also to blunt Iran’s ability to undermine international law, project power across the Middle East, and threaten US servicemembers.
Since December, Biden has launched a task force – comprised of different departments including Justice, Treasury, Defense, Commerce and State are involved in the task force -- to see how US and western components are ending up in Iranian drones.
In January, the Quebec-based company Bombardier Recreational Products (BRP), best known for water-skis and snowmobiles, passed to the Canadian government its internal report on how its engines ended up in Iranian-made drones used by Russia in Ukraine. The BRP said it has established through a “thorough investigation” that an engine found in a downed Mohajer-6 drone had not been sold directly to either Iran or Russia. Bombardier ended supplies of the engines to Iran in 2019, although the Mahtabal company in Tehran still markets itself as official representative for Rotax engines.
Earlier in the day, the adviser to Iran’s minister of intelligence claimed that 90 countries are "customers" of Iranian drones, and China is in the "queue" to receive 15,000 of these drones. The Wall Street Journal recently reported that an Iranian delegation has travelled to Russia to build a factory capable of producing six thousand UAVs designed by Tehran to be used in the war against Ukraine.
Condemning violations of human rights and state-sponsored terrorism by the Iranian Government, the bipartisan group of Representatives submitted a resolution on Tuesday, which was referred to the Committee on Foreign Affairs. The motion was introduced by California's Republican lawmaker Tom McClintock and is cosponsored by 165 other representatives.
The resolution “calls on relevant United States Government agencies to work with European allies, including those in the Balkans where Iran has expanded its presence, to hold Iran accountable for breaching diplomatic privileges, and to call on nations to prevent the malign activities of the Iranian regime’s diplomatic missions, with the goal of closing them down and expelling its agents."
It also emphasizes that Washington “stands with the people of Iran who are legitimately defending their rights for freedom against repression, and condemns the brutal killing of Iranian protesters by the Iranian regime; and recognizes the rights of the Iranian people and their struggle to establish a democratic, secular, and nonnuclear Republic of Iran.”
The resolution mentions the popular antigovernment protests in 2017, which resulted in at least 25 deaths and 4,000 arrests, and the protests in November 2019, when about 1,500 people were killed during less than two weeks of unrest, as well as the current wave of protests ignited by the death of Mahsa Amini, a 22-year-old Kurdish Iranian woman who was arrested in mid-September 2022 by the morality police that enforce the regime’s mandatory dress code laws.
Noting that women and youth have led the 2022 protests in Iran to demand social freedom and political change, the resolution describes the uprising as “rooted in the more than four decades of organized resistance against the Iranian dictatorship.” The ongoing unrest have been most recently led by women who have endured torture, sexual and gender-based violence, and death.
It also mentions executions and death sentences in recent months and calls for measures to force the government to cease such repression.
In the 116th Congress, the House of Representatives passed House Resolution 752, "Supporting the rights of the people of Iran to free expression, condemning the Iranian regime for its crackdown on legitimate protests, and for other purposes,” it adds, urging the Administration to work to convene emergency sessions of the United Nations Security Council and to work with United States partners and allies to condemn the ongoing human rights violations perpetrated by the Iranian regime and establish a mechanism by which the United Nations Security Council can monitor such violations.
The resolution also mentions efforts by the international community against the crackdown on dissent in Iran, saying that on November 24, 2022, the United Nations Human Rights Council established a fact-finding mission to conduct an independent investigation into the ongoing deadly violence related to the protests in Iran that began on September 16, 2022. It also mentioned the resolution adopted by United Nations Economic and Social Council (ECOSOC) on December 14, 2022, to expel Iran from the Commission on the Status of Women (CSW) for the remainder of its 4-year term ending in 2026.
Enumerating other actions by the US against the human rights violations by the clerical regime, the House resolution referred to the Department of State’s 2021 Country Reports on Human Rights Practices, released on April 13, 2022, which cites that “Iran’s government and its agents reportedly committed arbitrary or unlawful killings, most commonly executions for crimes not meeting the international legal standard of ‘most serious crimes’ or for crimes committed by juvenile offenders, as well as executions after trials without due process.”
“On October 25, 2021, the United Nations Special Rapporteur (UNSR) on the situation of human rights in the Islamic Republic of Iran, Javaid Rehman, told the United Nations General Assembly that almost all executions in the country constituted an arbitrary deprivation of life, noting the extensive, vague and arbitrary grounds in Iran for imposing the death sentence, which quickly can turn this punishment into a political tool,” read the resolution.
The resolution also condemns the Iranian regime’s arbitrary and brutal suppression of “ethnic and religious minorities, including Iranian Kurds, Baluchis, Arabs, Christians, Jews, Baha’is, Zoroastrians, and even Sunni Muslims,” noting that it deprived them of their basic human rights, and has in many cases executed them.