Week of October 5 - October 12th
AIC’s Iran digest project covers the latest developments and news stories published in Iranian and international media outlets. This weekly digest is compiled by Research Fellow Shiva Darian and Communications Associate Shahab Moghadam. Please note that the news and views expressed in the articles below do not necessarily reflect those of AIC.
FinCEN Issues Advisory on the Iranian Regime’s Illicit and Malign Activities and Attempts to Exploit the Financial System
The Financial Crimes Enforcement Network (FinCEN) issued an advisory today to help financial institutions better detect and report potentially illicit transactions related to the Islamic Republic of Iran. The advisory is also intended to help foreign financial institutions better understand the obligations of their U.S. correspondents, to avoid exposure to U.S. sanctions, and to address the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) risks that Iranian activity poses to the international financial system. The advisory provides information on the threats the Iranian regime poses to the U.S. financial system as well as to institutions that have correspondent banking relationships with U.S. financial institutions, describes deceptive financial strategies that the Iranian regime uses to evade sanctions, and provides red flag indicators related to specific malign activities and typologies. (US Treasury Department)
U.S. Warns That Iran Could Use Fraud to Duck Sanctions
Weeks before it is to reimpose another round of punishing sanctions on Iran, the Trump administration warned the world’s banks on Thursday that Tehran might try to use duplicitous means to soften the sanctions’ bite and continue to fund terrorism.
Iran’s bankers and officials have used front companies, fraudulent documents and other measures to generate revenue for the country’s terrorist activities, the administration said.
“Any country that allows its central bank to be involved in deception in support of terrorism requires the highest levels of scrutiny, particularly when the country itself is the world’s largest state sponsor of terrorism,” said Sigal Mandelker, the Treasury under secretary for terrorism and financial intelligence. (New York Times)
Kerry: 'I have not met with any Iranians' since Trump pulled out of Iran deal
Former Secretary of State John Kerry said he has not met with any Iranians since President Donald Trump pulled out of the Iran nuclear deal, despite vocalizing his disagreement with the administration's decision.
"I'm speaking out as a citizen in America," Kerry said in an interview with CNN's Michael Smerconish that aired Saturday morning. "If they don't want me to speak out, that's a different issue. But I'm telling you, I have not met with any Iranians since the President pulled out of the agreement, period."
Current Secretary of State Mike Pompeo said last month that Kerry's behavior was "unseemly and unprecedented" after Kerry said he had met with Iranian Foreign Minister Javad Zarif a few times since leaving office. (CNN)
Top Oil Traders Say Iran Sanctions Hit Harder Than Expected
Sanctions on Iranian oil exports are hitting much harder than most people predicted as the administration of U.S. President Donald Trump takes a tough line on enforcement, said executives from the world’s largest energy traders.
Perhaps 2 million barrels a day of Iranian crude could eventually be lost to the global market, said Jeremy Weir, chief executive officer of Trafigura Group Pte. While other traders including Vitol Group of Cos. and Gunvor Group saw the impact closer to 1 million, that’s still twice as much as most people initially predicted.
"Iranian exports of crude oil will be much reduced,” Vitol Chairman Ian Taylor said in a Bloomberg television interview. That’s largely the cause of the severe “fear factor” in the crude market that’s driven prices up to $85 a barrel, he said. (Bloomberg)
Iran's Khamenei orders officials to resolve economic crisis
Iran’s Supreme Leader Ayatollah Ali Khamenei has ordered officials to urgently find solutions to ease an economic crisis spurred by the re-imposition of U.S. sanctions, the semi-official Fars news agency reported on Thursday.
Washington reintroduced steps against Iran’s currency trade, metals and auto sectors in August after the U.S. withdrawal from a multinational 2015 deal that lifted sanctions in return for limits on Iran’s nuclear program. U.S. curbs on Iran’s oil exports are set to come into force in November.
Combined with rising inflation, growing unemployment, a slump in the rial and state corruption, this has caused Iran’s economy to deteriorate. The International Monetary Fund predicts it will shrink 1.5 percent this year and 3.6 percent in 2019, before recovering slowly. (Reuters)
North Sea Rhum gas field deal moves closer amid Iran sanctions
A deal to buy three key North Sea gas fields has moved closer after uncertainty created by US sanctions against Iran delayed the process.
Rhum and its neighbouring assets the Bruce and Keith fields deliver about 5% of the gas produced in the UK.
The Rhum field - about 240 miles north east from Aberdeen, off Shetland - is co-owned by the Iranian Oil company.
BP is also a partner but its stake is in the process of being sold to Serica Energy.
The sanctions followed US President Donald Trump's announcement that the US was withdrawing from the Iran nuclear deal. (BBC News)
Aso asks Mnuchin for relief from Iran sanctions
Japan's Finance Minister Taro Aso on Thursday pressed his U.S. counterpart Steven Mnuchin to ensure Japanese firms are not hurt by Washington's sanctions on Iran.
The United States' withdrawal from the 2015 Iran nuclear deal means sanctions on financial institutions that do business with Iran will be restored in November.
Aso told a press conference that he relayed to Mnuchin his "hope that Japan's concerns are addressed" in the meeting on the sidelines of a gathering of finance leaders from the Group of 20 major economies. (The Mainichi)
Italy Appeal Court Dismisses Iran Asset Seizure
An Italian appeal court has overturned an earlier verdict by a lower court to temporarily freeze $5 billion belonging to the Central Bank of Iran demanded by American plaintiffs who blame Iran for a 1983 bombing of a US Marine Corps barracks in Beirut.
Mohsen Mohebbi, head of the Presidential International Legal Center, told IRNA on Wednesday that the verdict of the Rome Court of Appeals was reached following efforts by CBI lawyers in Italy.
The US Supreme Court in 2016 had ruled that the assets must be turned over to American families of victims of the bombing.
"The US court’s verdict has not been recognized in Italy by a court in Rome that in June imposed a temporary freeze on CBI assets following a request by American plaintiffs," Mohebbi said. Iran has denied any involvement in the Beirut attack.
The International Court of Justice (ICJ), the principal judicial organ of the United Nations, held public hearings in the case concerning Iranian assets as of Monday. In 2016, Iran had filed a formal complaint with the court to recover nearly $2 billion in assets frozen in the United States. (Financial Tribune)
Moscow Mediating Between Israel and Iran After S-300 Delivery, Report Says
Russia has reportedly been trying to open communication channels between Israel and Iran "in order to reduce tensions and prevent friction" in Syria after the delivery of the S-300 missile systems, London-based Arabic language newspaper Asharq Al Awsat reported Saturday.
According to the Saudi-owned paper, a "knowledgeable" Russian source gave this information, and did not rule out Moscow playing the "role of mediator."
Moscow said on Tuesday that it had delivered the S-300s, a decision it took after accusing Israel of indirect responsibility for the downing of a Russian spy plane by Syrian forces as they fired on attacking Israeli jets last month. (Haaretz)
Iran Widens an Already Huge Rift Between Europe and U.S.
By: Steven Erlanger
Of all the issues dividing Europe and the Trump administration, Iran has become the sharpest, with the Europeans actively working against United States policy, placing them in league with Russia, China and Iran.
Since earlier this year, when it pulled out of the Iran nuclear deal that was a centerpiece of former President Barack Obama’s diplomacy, the Trump administration has pressed ahead with punishing sanctions against Tehran.
The leading countries of Europe, meanwhile, trying to preserve the nuclear accord, are looking to set up an alternative payment mechanism that would sidestep the American-dominated banking system, and Washington’s new sanctions. (New York Times)