Emerging Trends in Financial Crime in Iran: US Treasury Issues Advisory to Combat Terrorism-Financed Activities
Combating the Increasing Threat of Terrorism-Financed Activities
In a move aimed at combating the growing threat of terrorism-financed activities in the Middle East, the United States Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued an advisory warning financial institutions to be on high alert for suspicious transactions linked to Iran-backed terrorist organizations.
Typologies and Red Flags
The advisory highlights several typologies used by these groups to illicitly access and manipulate the international financial system, as well as providing red flags that may indicate potential illegal activity. These include:
- Cash-intensive businesses
- Shell companies
- Unusual payment patterns
- Transactions involving countries with high levels of corruption or lack of transparency
Preventing Illicit Activities
According to FinCEN Director Andrea Gacki, “Terrorist organizations and activity supported by and aligned with Iran should not benefit from access to the US or international financial systems.” The advisory aims to assist financial institutions in detecting potentially illicit transactions related to these groups, thereby preventing them from exploiting the global financial network for their nefarious activities.
Iran’s Alleged Involvement
Iran has been accused of financing a range of regional armed groups, including U.S.-designated Foreign Terrorist Organizations and Specially Designated Global Terrorist organizations such as:
- Lebanese Hizballah
- Hamas
- Palestinian Islamic Jihad
- Houthis
- Several Iran-aligned militia groups in Iraq and Syria
Commitment to Constraining Iran’s Ability to Exploit the International Financial System
In response, the Office of Terrorism and Financial Intelligence, which marks its twentieth anniversary this year, reaffirmed its commitment to constraining Iran’s ability to exploit the international financial system. Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson stated that “Iran continues to explore new ways to fund its dangerous and destabilizing activities, including the proliferation of dangerous weapons, malicious cyber activities, and financing of terrorist proxies in the region.”
Accessing the Advisory
The full advisory is available online at FIN-2024-A001.
By following this advisory, financial institutions can play a critical role in preventing terrorism-financed activities and constraining Iran’s ability to exploit the international financial system.