Financial Crime Investigation Techniques Unveiled to Tackle Iranian Sanctions Evasion
A stern warning has been issued by the Financial Crimes Enforcement Network (FinCEN) to financial institutions worldwide, urging them to be on high alert for suspicious transactions linked to the Islamic Republic of Iran. The advisory aims to help institutions better detect and report potentially illicit activity related to Iran, thereby strengthening the global fight against money laundering and terrorist financing.
Identifying Money Laundering Schemes
According to FinCEN Director Kenneth A. Blanco, crucial information gathered from Suspicious Activity Reports (SARs) has been instrumental in identifying money laundering schemes associated with the Iranian regime. The advisory provides concrete red flags and typologies to help financial institutions identify potentially illicit Iran-linked activity, ultimately enhancing the safety and security of the international financial system.
Red Flags and Typologies
The advisory warns of the following potential red flags:
- CBI officials routing transactions to personal accounts rather than central bank or government-owned accounts
- Individuals or entities with no central bank or government affiliation withdrawing funds from such accounts
- Wire transfers or deposits lacking information on the source of funds
Iranian Regime’s Abuse of the Global Financial System
The advisory details the Iranian regime’s abuse of the global financial system through illicit means, including:
- Senior officials of the Central Bank of Iran (CBI) using their official capacity to procure hard currency and conduct transactions for the benefit of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) and its terrorist proxy group, Lebanese Hizballah
- Iranian shipping companies, virtual currency, and precious metals being used as possible evasive practices
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 and/or designated Iranian persons. The advisory also warns of possible evasive practices involving Iranian shipping companies, virtual currency, and precious metals.
Expectations for Financial Institutions
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.
Request for Information
The Treasury and the U.S. Government are seeking information related to the Iranian regime’s efforts outlined in this advisory, as well as information pertaining to how the Iranian regime or Iranian entities subject to sanctions otherwise evade sanctions and access the U.S. financial system.
By staying vigilant and proactive, financial institutions can play a critical role in disrupting the Iranian regime’s illicit activities and maintaining the integrity of the global financial system.