Iran’s Reliance on Individual Intermediaries to Circumvent Sanctions Raises Concerns
As international sanctions against Iran begin to lift, concerns have been raised about the country’s long-standing reliance on individual intermediaries to conduct business overseas. These intermediaries, often politically connected and with ties to government officials, have played a crucial role in facilitating financial transactions and circumventing economic restrictions.
The Culture of Corruption and Bribery
However, this reliance has also led to a culture of corruption and bribery, which poses significant risks for multinational companies looking to do business in Iran. According to reports, many high-profile corruption cases have emerged in recent years, involving individuals such as:
- Babak Zanjani
- Reza Zarrab
- Abbas Yazdi
- Mehdi Hashemi Rafsanjani
- Reza Mostafavi Tabatabaei
The Petroleum Industry: A Suspectible Target for Bribery and Corruption
Iran’s petroleum industry has been particularly susceptible to bribery and corruption, with the awarding of rights, tenders, and contracts often marred by allegations of kickbacks and secret commissions. Some examples include:
- The IOEC oil rig scandal
- The 2001 Crescent Petroleum case
- The 2004 Statoil corruption case
The Link Between Intermediaries and Bribery
The use of intermediaries is closely linked to bribery, with foreign companies often relying on these individuals to facilitate transactions in Iran’s complex business environment. However, this reliance can also lead to allegations of corruption and financial crime.
Lack of Transparency and Accountability
In recent years, even companies considered to have successfully entered the Iranian market, such as MTN, have allegedly bribed public officials. The lack of transparency and accountability in Iran’s legal system has provided little guarantee for foreign investors, making it difficult to navigate the country’s business scene.
Risks and Challenges for Multinational Companies
As international sanctions are lifted, there is a risk that Iran will continue to rely on individual intermediaries to conduct business overseas, posing significant risks to multinational companies operating in the country. Conducting integrity due diligence on business partners, third-party agents, and intermediaries will be crucial to ensuring compliance in this complex environment.
About Aperio Intelligence
Aperio Intelligence is a corporate intelligence and financial crime advisory firm based in the City of London. Our team has decades of collective experience in advising clients on financial crime and intelligence gathering, helping them to manage risk and maximise potential. We provide tailored training and advisory services relating to financial crime, including anti-money laundering and sanctions compliance.
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