Financial Crime World

FINANCIAL INSTITUTIONS URGED TO BE VIGILANT AGAINST IRAN’S SANCTIONS EVASION TACTICS

Washington D.C., [Date] - The Financial Crimes Enforcement Network (FinCEN) has issued a warning to financial institutions worldwide to be on high alert against the deceptive practices used by the Islamic Republic of Iran to evade U.S. sanctions and fund its malign activities.

Iran’s Tactics for Evasion

The advisory, released today, provides detailed information on the Iranian regime’s tactics, including:

  • The use of front companies
  • Fraudulent documents
  • Exchange houses
  • Legitimate businesses
  • Government officials

These tactics are used to generate illicit revenues and finance terrorist activities.

Red Flags for Suspicious Activity

According to FinCEN Director Kenneth A. Blanco, the advisory aims to increase industry awareness and provide concrete red flags and typologies to help financial institutions identify potentially illicit Iran-linked activity.

Some of the red flags that may indicate suspicious activity include:

  • Transactions involving senior officials of the Central Bank of Iran (CBI)
  • Use of official capacity to procure hard currency
  • Conducting transactions for the benefit of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and its terrorist proxy group, Lebanese Hizballah
  • Involvement with exchange houses that may have exposure to the Iranian regime or designated Iranian persons

Due Diligence and Reporting Requirements

Financial institutions are advised to exercise appropriate due diligence when dealing with transactions involving:

  • Exchange houses that may have exposure to the Iranian regime or designated Iranian persons
  • Shipping companies involved in procurement networks for goods and services related to currency counterfeiting, dual-use equipment, and commercial aviation

FinCEN is urging financial institutions to report any suspicious activity related to the Iranian regime’s efforts to evade U.S. sanctions to FinCEN by filing a Suspicious Activity Report (SAR). When filing a SAR, financial institutions should provide all pertinent available information in the SAR form and narrative, and reference this advisory by including the key term “Iran FIN-2018-A006” in the SAR narrative and in appropriate SAR fields.

Commitment to Disrupting Iran’s Efforts

The Treasury Department is committed to working with international partners to disrupt the Iranian regime’s ability to evade sanctions and fund its malign activities. The full re-imposition of U.S. sanctions on November 5, 2018 has created an increased risk that Iranian financial institutions, the Iranian regime, and its officials will increase their efforts to evade U.S. sanctions.

“We expect Iran to continue attempting to engage in wide-scale sanctions evasion while simultaneously using its resources to fund a broad array of malign activity,” said Sigal Mandelker, Under Secretary of the Treasury for Terrorism and Financial Intelligence. “Financial institutions should continue to sophisticate their compliance programs to keep these actors from exploiting them.”

Conclusion

In conclusion, financial institutions are urged to be vigilant against Iran’s sanctions evasion tactics and report any suspicious activity related to these efforts to FinCEN by filing a SAR.