Financial Crime World

Here is the rewritten article in Markdown format:

Financial Institutions Warned of Iranian Regime’s Deceptive Practices

Washington, DC - FinCEN Issues Advisory to Help Detect Illicit Transactions

The Financial Crimes Enforcement Network (FinCEN) has issued an advisory to help financial institutions detect and report potentially illicit transactions related to the Islamic Republic of Iran. The move aims to alert foreign financial institutions to the obligations of their U.S. correspondents, avoid exposure to U.S. sanctions, and address anti-money laundering/combating the financing of terrorism (AML/CFT) risks posed by Iranian activity.

Threats Posed by the Iranian Regime

The advisory highlights the threats the Iranian regime poses to the U.S. financial system and institutions with correspondent banking relationships with U.S. financial institutions. The regime uses deceptive financial strategies to evade sanctions, including:

  • Front companies
  • Fraudulent documents
  • Exchange houses
  • Seemingly legitimate businesses
  • Government officials

Red Flag Indicators

The advisory provides red flag indicators related to specific malign activities and typologies, such as:

  • CBI officials routing transactions to personal accounts rather than central bank or government-owned accounts
  • Iranian shipping companies using virtual currency/precious metals to evade sanctions
  • Individuals or entities with no central bank or government affiliation withdrawing funds from accounts

Importance of Due Diligence

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. The advisory details examples of exchange house-related schemes and warns of possible Iranian abuses of virtual currency and precious metals to evade sanctions.

FinCEN’s Expectations

Following the re-imposition of sanctions lifted under the Joint Comprehensive Plan of Action (JCPOA), FinCEN expects that Iranian financial institutions, the Iranian regime, and its officials will increase their efforts to evade U.S. sanctions to fund malign activities and secure hard currency for the Government of Iran.

Quotes from FinCEN Officials

  • “This advisory lays out in great detail the extent to which the Iranian regime uses deceptive practices… Any country that allows its Central Bank to be involved in deception in support of terrorism requires the highest levels of scrutiny.” - Sigal Mandelker, Under Secretary of the Treasury for Terrorism and Financial Intelligence
  • “Crucial insight provided through Suspicious Activity Reports (SARs) and other valuable information conveyed by the financial sector have been instrumental in identifying money laundering and other financial schemes associated with the Iranian regime.” - Kenneth A. Blanco, FinCEN Director