Date
17 August 2017
Suitcases full of dollars were carried by couriers to Iran from Dubai, and sometimes Turkey, sources tell Reuters. Photo: Bloomberg
Suitcases full of dollars were carried by couriers to Iran from Dubai, and sometimes Turkey, sources tell Reuters. Photo: Bloomberg

Iran smuggles in US$1 bln in cash to skirt sanctions: Reuters

At least US$1 billion in cash has been smuggled into Iran through front companies, couriers and money changers as the country seeks to avoid Western sanctions, Reuters reported.

The figure is much bigger than previously reported. In December, the US Treasury said the Iranian government had obtained hundreds of millions of dollars in bank notes using front companies.

Sanctions imposed by the West over Iran’s nuclear program have shut Tehran out of the global banking system, making it hard to obtain the US dollars it needs for international transactions.

But interviews by the news agency with Iranian officials and Western diplomatic and intelligence sources show that at least US$1 billion in US bank notes had been smuggled into Iran in recent months, with the Iranian central bank playing an important role.

The sources said the cash was hand-carried by couriers on flights from Dubai or Turkey, or brought across the Iraq-Iran border.

Before it reached Iran, the cash was passed through money changers and front companies in Dubai, in the United Arab Emirates, and Iraq, they added.

Western and Iranian sources said Iran’s central bank had in recent months worked with other entities, including other sanctioned Iranian companies, to find ways to obtain US dollars, including using front companies and their networks.

They said the central bank had given the orders to the front companies abroad to buy dollars.

The use of multiple front companies, which bought dollars from currency traders in Dubai and Iraq, was preferred as it concealed the overall size of the operation, the sources said.

Suitcases full of dollars were carried to Iran from Dubai, and sometimes Turkey, an Iranian government official with knowledge of the operations said. Groups of three or four couriers would usually fly first or business class, the official said.

In return for dollars, the front companies were paid in United Arab Emirates dirhams or oil, the Iranian and Western sources said.

A report last year by the UN Security Council’s Panel of Experts on Iran said Iran had used cash and money changers to help get around banking restrictions.

“The Panel continues to receive information from states and financial institutions that Iranian companies could operate through trading companies or shell companies in neighboring states,” the UN report said.

US Executive Order 13622, which came into effect in 2012, prohibits the purchase or acquisition of US bank notes by the government of Iran.

An Iraqi government financial adviser told Reuters that Iraq was a major source of dollars for Iran, but the Iraqi government had this year begun to restrict the central bank’s dollar sales to private banks and traders in an attempt to control the flow of dollars out of the country.

The sources said US$500 million was obtained for Iran by two Dubai-based front companies that have been sanctioned by the US Treasury.

One company was Sima General Trading Company, sanctioned in 2013 for acting as an Iranian government front company. The other was Belfast General Trading, a Dubai commodities company sanctioned last year.

The Treasury said Belfast General Trading had converted over US$250 million, which was hand-carried to Tehran.

The Treasury also said other individuals had delivered hundreds of millions of dollars in US bank notes to Iran’s government in breach of sanctions.

Companies and institutions said to be involved in the operations declined to comment.

Iran is currently holding talks with world powers about its nuclear program, seeking a deal to lift the sanctions that have halved its oil exports and hammered its economy.

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CG

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