Bahrain brings charges in vast money laundering case linked to Iranian state-owned banks

The bank at the center of the allegations was set up and controlled by Iran’s Bank Saderat and Bank Melli. (Shutterstock)
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Updated 13 February 2020

Bahrain brings charges in vast money laundering case linked to Iranian state-owned banks

  • Billions of dollars were funneled through Future Bank, which was controlled by Iran’s Bank Saderat and Bank Melli
  • Operation allowed Iranian organizations, including some sanctioned for terror financing, to secretly move money internationally,

DUBAI: Bahrain launched legal proceedings on Thursday against a number of individuals and businesses involved in a vast money laundering scheme linked to state-owned Iranian banks.

The operation allowed Iranian organizations, including some sanctioned for terror financing, to secretly move money internationally, the Kingdom’s prosecutors said. 

Billions of dollars were funneled through Future Bank, which was based in Bahrain but set up and controlled by Iran’s Bank Saderat and Bank Melli.

The defendants are charged with multiple offences under Bahrain’s anti-money laundering  and banking laws, the state Bahrain News Agency reported.

Future Bank, which was shut down in 2016, engaged in “systemic and wide scale violations of Bahrain’s banking laws,” the Central Bank of Bahrain (CBB) said, referring to a 2018 report.

Further investigations found the bank, acting under the direction of Bank Saderat and Bank Melli, to have executed thousands of international financial transactions worth $7 billion while concealing the involvement of Iranian entities. 

Staff deliberately removed information when transferring money via the SWIFT network – an illicit practice referred to as “wire stripping”. 

Another technique involved a covert messaging service as an alternative to SWIFT, which concealed transactions from Bahraini regulators.

The years-long investigation by the CBB, the Ministry of Interior, and international regulatory experts, reviewed tens of thousands of Future Bank documents.

Rasheed Al-Maraj, the CBB governor said the complexity and magnitude of the investigations were compounded by the need to disentangle the subterfuge of Iranian-backed financing of terrorism.

“Bahrain is committed to full implementation of international standards in combatting money laundering and the financing of terrorism,” he said. “Investigating and prosecuting violations is an essential part of protecting the integrity of the international financial system.”

Bahrain’s public prosecution has referred the cases to Bahrain’s High Criminal Court, with further charges expected as investigations continue into thousands of remaining transactions.


Iraq’s foreign minister makes first visit to Iran

Updated 54 min 39 sec ago

Iraq’s foreign minister makes first visit to Iran

  • Iran sees neighboring Iraq as a possible route to bypass US sanctions that President Donald Trump re-imposed in 2018

TEHRAN: Iraq’s foreign minister arrived Saturday in Tehran for bilateral talks with senior Iranian officials, according to the state-run news agency.
IRNA reported that Fuad Hussein planned to meet his Iranian counterpart Mohammad Javad Zarif and President Hassan Rouhani, in what marked his first visit to the Iranian capital.
Zarif visited Baghdad in mid-July, when he met with Hussein and Iraqi Prime Minister Mustafa Al-Kadhimi. It was Zarif’s first visit to Iraq since a US airstrike in January killed a top Iranian general, Qassim Soleimani, outside Baghdad’s international airport. The strike catapulted Iraq to the brink of a US-Iran proxy war that could have destabilized the Middle East.
After Zarif’s trip, the Iraqi premier visited Iran in July.
The report did not elaborate on the main reasons behind the top Iraqi diplomat’s two-day trip to Tehran.
Iran sees neighboring Iraq as a possible route to bypass US sanctions that President Donald Trump re-imposed in 2018 after pulling the US out of the 2015 nuclear deal between Tehran and world powers.
Last year, Iran’s exports to Iraq amounted to nearly $9 billion, the official IRNA news agency reported on Tuesday. It said the two nations will discuss increasing the amount to $20 billion.
Before the current global pandemic, some 5 million Iranian pilgrims annually brought in nearly $5 billion visiting Iraq’s Shiite holy sites.
Iran has seen the worst outbreak in the region, with more than 443,000 thousand confirmed cases and at least 25,300 deaths.
A news website affiliated with Iranian state TV, yjc.ir, reported that Iran canceled all its flights to Iraqi cities until the religious holiday of Arbaeen, due to concerns over the coronavirus outbreak. The holiday marks the end of the forty days of mourning that follow annually on the death anniversary of the seventh-century Muslim leader Hussein, who was killed at the Battle of Karbala during the tumultuous first century of Islam’s history.
Iran fought an eight-year war with Iraq that killed nearly 1 million people on both sides, after former Iraqi dictator Saddam Hussein invaded in the early 1980s.