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Iran Democracy Monitor - No. 137

Edited by Ilan Berman and Mollie Adatto
September 4, 2013


IRAN'S ILLICIT FINANCE HUB
Iran and the Central Asian nation of Tajikistan share more than language and culture, it seems. Tajikistan-based Iranian entrepreneur Babak Zanjani, chair of the Dubai-based Sorinet Group, a conglomerate of some two dozen different companies, is “moving billions of dollars on behalf of the Iranian regime, including tens of millions of dollars to the Iranian Revolutionary Guard Corps company.” So says the U.S. Treasury Department, which in April targeted Zanjani and a number of his front companies as part of a crackdown on illicit commercial activity related to Iran's Revolutionary Guard Corps (IRGC). Zanjani likewise has been sanctioned by the European Union for expediting Iranian oil deals and "washing" the resulting revenue for Iran in Dushanbe.

The emergence of Tajikistan as a money laundering center for Iran is not altogether surprising. The country was recently ranked the the fourth most vulnerable in the world for money laundering and terrorist financing by the Basil Institute on Governance. Soon after the rankings were published this past June, Tajik President Emomali Rakhmon passed vaguely worded and weakly enforced legislation establishing criminal penalties for money laundering in Tajikistan. But Western officials believe that these steps are merely "window dressing," and that Tajikistan will continue to play a prominent role as an illicit finance hub for Iran. (Eurasianet, August 21, 2013)

ROUHANI STARTS TO TACKLE IRAN'S ECONOMIC MALAISE

Over the past two years, the Iranian economy has been under heavy pressure from Western sanctions, which have prompted a constriction of the country's oil exports and a drastic devaluation of the rial. Not surprisingly, righting Iran's economic ship of state has emerged as a top priority for new Iranian President Hassan Rouhani. And just weeks into his tenure, Rouhani has begun to tinker with the country's financial institutions. Most prominently, in late August Rouhani appointed Valiollah Seif, a technocrat, as the head of Iran's central bank. The move is seen as a step forward in Rouhani's promises to address soaring national inflation and rising unemployment; Seif's predecessor as central bank president, Mahmoud Bahmani, failed to control the fluctuations of the rial during his term in office, exacerbating worsening domestic conditions.

Observers, however, are sounding the alarm over Seif. According to Ali Alfoneh of the Foundation for Defense of Democracies, Seif "has a track record of working with sanctions-busting and proliferation-boosting banks." These include Karafarin Bank, Bank-e Sepah, Bank-e Mellat, Bank-e Saderat, and Bank-e Melli and its subsidiaries, all of which have been placed on the Treasury Department's Specially Designated Nationals (SDN) list for their role in illicit activities. (Reuters, August 27, 2013; FDD Policy Brief, August 27, 2013)

SECOND THOUGHTS ON SYRIA?

Over the past two-and-a-half years, Iran has become deeply embroiled in the widening civil war taking place in Syria, providing extensive economic and military support to the regime of Bashar al-Assad in his campaign against opposition elements. But recent movement toward military action against Syria on the part of the United States and its European partners appears to be giving the Iranian regime pause. Officially, Iranian leaders - including Supreme Leader Ali Khamenei - continue to maintain their steadfast support for the Assad regime. To that end, members of the Foreign Affairs Committee of Iran's parliament, or majles, have declared publicly that Iran "views Syria as parts of its vital interests" and would retaliate in response to an attack on it.

Privately, however, there appear to be growing divisions over the extent of Iran's backing for Damascus. Former Iranian president Ali Akbar Hashemi Rafsanjani, for example, has emerged as an opponent of the regime's current Syria policy, going against the official grain to acknowledge the Syrian government's use of chemical weapons and beseeching Qassem Suleimani, head of the IRGC Qods Force paramilitary unit, to stop sending volunteers to fight on behalf of Assad against the Syrian opposition. (Tehran Rooz, August 28, 2013; Jerusalem Post, September 2, 2013)


Related Categories: Middle East; Iran Freedom Initiative; Iran

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