IRAN’S DECEPTIVE PRACTICES EXPOSED IN Fincen Advisory: Financial Institutions Warned of Illicit Transactions
The US Treasury’s Financial Crimes Enforcement Network (FinCEN) has released a new advisory that sheds light on the deceptive financial strategies used by Iran to evade sanctions and fund its malign activities. The advisory provides red flag indicators for financial institutions to identify potentially illicit transactions linked to the Iranian regime.
Iran’s Deceptive Practices
According to the advisory, Iran uses various methods to generate illicit revenues and finance its malicious activities, including:
- Front companies
- Fraudulent documents
- Exchange houses
- Seemingly legitimate businesses
- Government officials
These tactics have benefited groups such as the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and Lebanese Hizballah.
Red Flags for Financial Institutions
The advisory warns financial institutions to look out for the following red flags:
- Iranian shipping companies using deceptive practices to evade sanctions
- Virtual currency abuses to access the international financial system
- Transactions involving CBI officials routing funds to personal accounts
- Wire transfers or deposits with incomplete information about the source of funds
- Transactions involving jurisdictions with higher risk of dealing with entities linked to the Iranian regime
FinCEN’s Role in Identifying Money Laundering
FinCEN Director Kenneth A. Blanco emphasized that Suspicious Activity Reports (SARs) have been instrumental in identifying money laundering and other financial schemes associated with Iran. The advisory aims to enhance industry awareness, increase SAR reporting, and strengthen the safety and security of the US financial system.
Increased Efforts by Iranian Financial Institutions
The full re-implementation of sanctions lifted under the Joint Comprehensive Plan of Action (JCPOA) is expected to prompt increased efforts by Iranian financial institutions and officials to evade US sanctions. Treasury officials are seeking information related to Iran’s efforts to evade sanctions and access the US financial system.
Advice for Financial Institutions
Financial institutions are advised to exercise due diligence when dealing with transactions involving:
- Exchange houses linked to Iran
- Front companies used by Iran
- Shipping companies linked to Iran
The advisory provides concrete examples of schemes and typologies for financial institutions to identify potentially illicit activity. By taking these steps, financial institutions can help prevent the misuse of the US financial system and support national security goals.
Conclusion
In conclusion, the FinCEN advisory serves as a warning to financial institutions of the deceptive practices used by Iran to evade sanctions and fund its malign activities. By staying vigilant and exercising due diligence, financial institutions can play a crucial role in preventing the misuse of the US financial system and supporting national security goals.