Monday, June 27, 2016

Eye on Iran: Money-Laundering Standards Body Suspends Some Iran Restrictions








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WSJ: "The Financial Action Task Force, an international anti-money-laundering standards body, said Friday it would suspend some of its restrictions against Iran for a year to monitor Tehran's progress implementing changes to its regulatory regime. The White House has been pushing to ease the path for business into Iran since the implementation of the nuclear agreement, and removing Iran from the FATF blacklist would aid in that effort. Critics, however, are pushing back, saying Iran's conduct hasn't changed since the deal was implemented, citing, among other things, Iran's support for groups such as Hezbollah. The FATF, following its plenary session in South Korea this week, said it welcomed Iran's adoption of, and political commitment to, an action plan to address deficiencies in its anti-money laundering and counter-terrorist financing policies, as well as Iran's decision to seek assistance with implementation. Iran will remain on the blacklist until the full implementation is complete, and if Iran fails to demonstrate 'sufficient progress' at the end of the yearlong suspension, the restrictions will be reimposed, the FATF said, calling attention to Iran's issues with terrorism financing, without specifying what those issues were... North Korea and Iran are the only countries labeled as 'high-risk or uncooperative jurisdictions' by the FATF... There has been pressure on the FATF from U.S. interests to keep Iran on the blacklist. Pressure group United Against Nuclear Iran sent a letter to the body, saying no financial institution can afford the risk of investing in Iran until it reaches international standards." http://t.uani.com/29210kR

AFP: "Hezbollah chief Hassan Nasrallah on Friday said his group would not be affected by fresh US sanctions because it receives its money directly from Iran, not via Lebanese banks. In a speech broadcast by the Shiite party's Al-Manar station, Nasrallah brushed off assertions that Hezbollah would be hurt by US sanctions on Lebanese financial institutions that work with the group. 'We do not have any business projects or investments via banks,' Nasrallah said, insisting the group 'will not be affected.' 'We are open about the fact that Hezbollah's budget, its income, its expenses, everything it eats and drinks, its weapons and rockets, are from the Islamic Republic of Iran,' he added. Iran was instrumental in Hezbollah's inception three decades ago and has provided financial and military support to the group. In December, the US Congress voted to impose sanctions on banks that deal with Hezbollah, considered a 'terrorist group' by the US. And last month, Lebanon's central bank instructed the country's banks and financial institutions to comply with the new measure against the Lebanese Shiite group. Hezbollah has fiercely criticised the law and accused central bank governor Riad Salameh of 'yielding' to Washington's demands. 'As long as Iran has money, we have money... Just as we receive the rockets that we use to threaten Israel, we are receiving our money. No law will prevent us from receiving it,' Nasrallah said." http://t.uani.com/294xtYw

Reuters: "The first of Iran's new oil and gas investment contracts for international companies will be launched this summer and will invite bids to develop 10-15 fields, oil minister Bijan Zanganeh was quoted by the SHANA news agency as saying. The Iran Petroleum Contract (IPC) is a cornerstone of the country's plan to raise crude production to the pre-sanctions level of four million barrels per day (bpd), and the OPEC member desperately needs $200 billion in foreign money to reach the goal. Its launch has been postponed several times as hardline rivals of pragmatist President Hassan Rouhani resisted any deal that could end a buy-back system dating back more than 20 years under which foreign firms have been banned from booking reserves or taking equity stakes in Iranian companies. Zanganeh said a final draft for the contracts will be approved by the government shortly after some amendments to appease both critics and foreign companies." http://t.uani.com/29210l0

Business Risk

Reuters: "Oil minister Bijan Zanganeh has handed the running of Iran's national oil company to a trusted ally in a push to agree long-awaited deals with global oil majors, which could be derailed by next year's presidential polls... Iran last week selected several local firms which can become partners of Western oil companies and on Monday, Zanganeh pledged to tender 10 to 15 fields under new deals as early as this summer. Oil majors insist these must be more attractive than the loss-making contracts of the 1990s. The change follows the naming this month of Zanganeh's trusted ally Ali Kardor as head of the National Iranian Oil Company (NIOC), replacing Rokneddin Javadi who had held the post since 2013 and has been made deputy oil minister for supervising hydrocarbon resources. Iranian and industry sources say the NIOC reshuffle is aimed at boosting oil exports and getting some deals in place ahead of Iran's 2017 presidential election as an internal political power struggle intensifies. 'There has been a lot of pressure on Zanganeh for not doing much to bring new oil investments as quickly as promised and until now the new contracts are still being drafted,' said the oil executive... 'We haven't seen anything. Nothing at all which would indicate that work on contracts is progressing,' a top executive of a major Western oil company with a long history of dealings with Iran said. 'And to be honest I'm not very concerned about it as my ability to invest in new projects is severely restricted at the moment by low oil prices,' he added. Others dismissed the chances of Zanganeh's changes speeding up new deals before the mid-2017 presidential election. 'The energy sector in Iran is more linked to politics than any other country,' said an Iranian industry source. 'I don't think we will see anything happening this year or next year.'" http://t.uani.com/28Xe8DG

Bloomberg: "Five months after sanctions on Iran were eased, the rapid rise in the country's oil production and exports appears to be ending as quickly as it began. Any slowdown in Iranian output will hasten the rebalancing of global oil supply and demand, adding weight to the assertion by Saudi Arabia's oil minister Khalid Al-Falih that 'the oversupply has disappeared.' Iran's observed crude oil exports, which exceeded 2 million barrels a day in both April and May, slipped by almost 20 percent in the first three weeks of June. One of the country's primary aims after restrictions on oil sales were eased was to regain its markets in Europe. Before the latest sanctions were imposed in 2012, Iran was exporting about 600,000 barrels a day of crude to countries in the European Union, with Italy, Spain and Greece its biggest buyers... By May, Iran had regained more than half of those EU sales, delivering more than 350,000 barrels a day of crude and spurring expectations that flows would soon be back to their pre-sanctions level. Upgrades were also completed at Iran's principal loading terminal at Kharg Island, allowing it to load nine vessels at a time and store 30 million barrels of crude.But deliveries fell to 285,000 barrels a day in the first three weeks of June. What happened? ... But more worrying for Iran is the difficulty that it seems to have had in persuading its biggest pre-sanctions buyers to resume purchases." http://t.uani.com/28XFM7y

Reuters: "As Western planemakers seek to finalise lucrative deals to sell some 200 jets to Iran, doubts are growing over the sale of a dozen Airbus A380 superjumbo jets to the country's national flag carrier, several people familiar with deal said... The order for the double-decker superjumbo jetliners grabbed attention in January as part of a provisional deal for 118 Airbus jets worth $27 billion signed in Paris in the presence of Iranian President Hassan Rouhani. The inclusion of the world's largest jetliner was hailed as a symbol of thawing relations and a sign of Iran's determination to compete economically with Arab Gulf states that fly the jet... 'We always made clear this is an option,' an Iranian official told Reuters, asking not to be identified. 'It is possible to switch to other models,' he added. An industry source familiar with the region said Iran was committed to the rest of the order, but was less interested in taking the A380s, ordered in part for political reasons... Problems in financing must also be resolved as some banks have shied away from financing either the Airbus deal or a similar order for Boeing to sell or lease 109 jets to IranAir. Those uncertainties have also raised questions over the timing of the payment of deposits to Airbus on the wider order." http://t.uani.com/28YqgpA

Sanctions Relief

Reuters: "Indonesia's Pertamina expects to sign an agreement with Iran to evaluate investing in two oil and gas blocks sometime after the Muslim Ramadan holy period that ends in July, a company official said on Monday... A deal would be Indonesia's first investment in Iran's upstream oil sector. Last month Pertamina inked an agreement to purchase 600,000 tonnes of liquefied petroleum gas from state-owned marketer National Iranian Oil Co. (NIOC) Pertamina plans to sign a memorandum of understanding with state-owned NIOC to evaluate the two blocks and eventually import crude from the sites for processing in Indonesia if the bid is successful, Pertamina upstream director Syamsu Alam told Reuters. 'We want to manage those blocks. We want to be operator in those blocks,' Alam said in a phone call, without identifying the areas." http://t.uani.com/28Yizyh

Mehr (Iran): "Iran's oil exports to Spain have climbed by three million barrels per month upon signing short-term contracts with Cepsa, Respol as well as BP oil industry companies. The National Iranian Oil Company (NIOC) and Spain's Repsol S.A. have inked an agreement to deploy a one-million-barrel shipment on a monthly basis turning Repsol into the second Spanish buyer of the Iranian crude after Cepsa. The new contract, which follows an earlier one signed with Cepsa (Spanish Petroleum Company), had doubled Iran's oil export volume to the European country. In addition, NIOC has sealed a separate agreement with BP (British Petroleum) in the form of spot contracts to export a total of one million barrels per month. Overall, given the signing of three contracts to sell oil to Cepsa and Repsol of Spain and well as BP, the volume of Iran's crude exports has tripled as compared with the figure during sanction years." http://t.uani.com/2926NHg

Press TV (Iran): "Two Italian energy companies, Saras SpA and Iplom SpA, have reportedly signed long term contracts with the National Iranian Oil Company (NIOC) to purchase crude oil from Iran. As of this week, in a contact with Saras SpA, Iran will export 60,000 to 65,000 barrels of oil per day to the company's refineries for one year, Oilprice.com reported. Saras SpA currently buys approximately 30,000 to 35,000 barrels per day (bpd). Last month, NIOC announced that the company was in negotiations with Italy's Eni SpA for a deal that could result in the sale of 100,000 bpd of oil. Oilnews has also quoted Iran's Petroleum Minister Bijan Zangeneh as saying that along with the oil contracts with the two Italian companies, the country has plans to sign a $1.5 billion agreement with Eni to develop phase three of Darkhovin oil field." http://t.uani.com/28YuCNk

Regional Destabilization

Reuters: "Iran's supreme leader has blasted as 'foolishness' a decision by Bahrain's leaders to strip a top Shi'ite Muslim cleric of his citizenship, and said it could provoke violence from Shi'ites, who make up the majority in the Sunni-ruled Gulf kingdom. The speech by Ayatollah Ali Khamenei, carried by state media, came after Bahrain's Sunni authorities stepped up measures against the island's Shi'ites and stripped their spiritual leader, Ayatollah Isa Qassim, of his citizenship. 'This is blatant foolishness and insanity. When he still could address the Bahraini people, Sheikh Isa Qassim... would advise against radical and armed actions,' Khamenei said in remarks carried by state television on Sunday. 'Attacking Sheikh Isa Qassim means removing all obstacles blocking heroic Bahraini youths from attacking the regime.'" http://t.uani.com/28XDZPF

Daily Star (Lebanon): "Former Prime Minister Saad Hariri lashed out at Hezbollah after its chief Sayyed Hasan Nasrallah said a day earlier that the group receives its budget from Iran, saying the group puts the interests of other countries before Lebanon. 'Saying that Hezbollah's money comes from Iran is admitting that Hezbollah follows Iran par excellence,' Hariri said during a speech at an iftar gathering at the Rashid Karami International Fair in northern Lebanon. Although Iranian support for his group has for long been a well-known fact, Nasrallah declared for the first time that Hezbollah is receiving its money and arms from Iran. 'As long as Iran has money, Hezbollah has money. ... Can we be any more frank than that?' he said. Nasrallah's remarks were made during a televised speech marking the passing of 40 days since the killing of Hezbollah's top commander Mustafa Badreddine in Syria... The Future Movement leader accused the group of putting the interests of other countries before the Lebanese interests. 'Some insist on putting Iran first, and Syria first, Iraq first, Yemen first and Bahrain first, and Lebanon ... at the end.' He said that Iran's arrogance and meddling in the region will lead to an escalation of tensions between the Arabs and Iran. 'Iran finances Hezbollah in Lebanon, Al-Hashd Al-Chaabi in Iraq, the Houthis in Yemen, the opposition in Bahrain and the killing of innocent people in Syria. It finances the bombings in Kuwait, the chaos in Qatif and the sectarian groups in Sudan, Egypt and Algeria,' he added." http://t.uani.com/28VHvoW

Daily Star (Lebanon): "Former Prime Minister Saad Hariri Sunday kept up a blistering tirade against Hezbollah, saying the Iranian-backed party was throwing the Lebanese youth and Lebanon's interests into the Syrian fire on Iran's orders. He also said Hezbollah leader Sayyed Hasan Nasrallah cannot end the party's deep involvement in the 5-year-old war in Syria if Iran does not want this... In a speech Saturday night during an iftar at the Rashid Karami International Fair in Tripoli in honor of families from Dinniyeh, Minyeh and Zgharta, Hariri blasted Hezbollah, saying the group was putting the interests of other countries before Lebanon after Nasrallah said a day earlier that the group receives its budget from Iran. He also accused Iran of funding strife in the Arab world for its support of armed factions in Syria, Iraq and Yemen and threatening Bahrain. 'Someone is bragging that he is an advanced military base ... for Iran. And that all the money, missiles and salaries come from the treasury of Iran's Revolutionary Guard. He is recognizing that it is an Iranian party par excellence and an investment for the Iranian political, religious and military project,' Hariri said. 'And that the orders of Wilayat al-Faqih are more important to him than Lebanon's interest and the interest of all Arabs. This is a first rank accusation charge. A party declaring aloud that it executes orders from a foreign country.'" http://t.uani.com/298lc23

Human Rights

AFP: "An Iranian-British woman detained in Iran on charges of seeking to overthrow the government was implicated in anti-regime protests in 2009, a judicial official said. There had previously been scant information about the grounds for the arrest in April of Nazanin Zaghari-Ratcliffe, a 37-year-old employee of the Thomson Reuters Foundation. But a report from Iran's Mizan news agency late Friday said she was implicated in mass protests against the re-election of hardline president Mahmoud Ahmadinejad in 2009, a movement dubbed 'the sedition' by the authorities. 'In 2014-2015, the intelligence service of the Revolutionary Guards in Kerman province identified and arrested members of one of the groups that during the sedition conducted activities against the security of the country by designing websites and carrying out campaigns in the media,' Yadollah Movahed, head of Kerman's justice department, told Mizan. 'Some of the group were outside Iran, including the suspect Nazanin Zaghari,' he added. Zaghari-Ratcliffe, was arrested at Tehran airport on April 3 as she prepared to return to Britain with her two-year-old daughter after visiting family in Iran." http://t.uani.com/29g4s8e

Opinion & Analysis

Mark Dubowitz & Toby Dershowitz in Medium: "Following its plenary meeting this week, the Financial Action Task Force (FATF) is set to maintain Iran on its black list, with a one-year suspension, though not removal, of the mandatory countermeasures applied to the Islamic Republic. FATF is an inter-governmental organization that serves as the preeminent global policymaking body for combating illicit finance. It does that primarily by setting global standards to combat money laundering, and finance for terrorism and proliferation. Its goal is to protect the international financial system from vulnerabilities and threats that emanate from countries that do not implement its standards, and to work with countries that seek to become responsible members of the international financial system. FATF's move signals that, notwithstanding intense pressure from Tehran, Iran's effort to legitimize its malign activities has not been matched by changes to its underlying conduct-the reason Iran has, along with North Korea, maintained its place on this blacklist and been subject to mandatory countermeasures. Following FATF's action, the base assessment of the risks of Iran's illicit conduct remains the same. Practically speaking, there is no change since, given the continued concerns over Iran's illicit conduct, financial institutions will continue to voluntarily implement strict countermeasures. This signals a recognition by the global community that Iran continues to represent a threat to the international financial system. Businesses considering ties to Iran will have to conduct enhanced due diligence that will prove a nightmare for them for a number of reasons. Many Iranian companies-including sanctioned entities such as the Islamic Revolutionary Guard Corps (IRGC)-utilize opaque corporate structures and shadow companies to hide their true ownership interests. The IRGC controls an estimated 30 percent of Iran's economy, and those seeking to do business in the country should be concerned that they may be inadvertently dealing with entities owned or controlled by sanctioned entities or those that may become sanctioned... Most large banks that care about long-term protection of their assets are not rushing back into Iran because they understand it has a long way to go before it's safe to do business there. Ultimately they are looking to avoid the massive sanctions, money-laundering, and corruption risk Iran poses to their stakeholders... Global financial institutions understand that this illicit conduct, not empty expressions of intent, must be changed before risking business with Iran. FATF's action this week serves as yet another reminder to 'know your customer.' Buyers should beware: Iran may be open for business, but is it not yet safe for it." http://t.uani.com/2925JmI

Globe & Mail Editorial: "Homa Hoodfar, a 65-year-old Canadian-Iranian university professor, should be home in Montreal right now but is instead being held by the Iranian government in the country's most notorious jail - a place where prisoners are routinely tortured. She has not been allowed contact with her family or her lawyer since she was arrested on June 6 in Tehran by Iran's Revolutionary Guard. No official charges have been announced. The Canadian government does not have formal diplomatic relations with Iran. Officials say they don't know why Ms. Hoodfar was arrested, and that they are concerned for her health. Ms. Hoodfar suffers from a neurological disorder and is unlikely to have access to the medication she needs. This farce would be unacceptable under any circumstances, but it is even more appalling because it appears Ms. Hoodfar may have been taken prisoner in the hope of exchanging her for another Canadian-Iranian dual citizen living in Toronto. Iran has long wanted to get its hands on Mahmoud Reza Khavari, the former chief of the Melli Bank of Iran, who fled to Canada in 2011 after prosecutors tried to question him in connection with an alleged embezzlement and money-laundering scheme... Ms. Hoodfar is a Canadian citizen being used as a pawn. Ottawa must respond. Canada lifted its economic sanctions on Iran in February - part of an international effort to bring Iran back into the fold. The Trudeau government should not hesitate to use whatever levers it has available to pressure Iran and free Homa Hoodfar." http://t.uani.com/290U72o
       

Eye on Iran is a periodic news summary from United Against Nuclear Iran (UANI) a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Eye on Iran is not intended as a comprehensive media clips summary but rather a selection of media elements with discreet analysis in a PDA friendly format. For more information please email Press@UnitedAgainstNuclearIran.com

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