Some 50,000 transactions suspected of money laundering were detected in the banking network in the past one and a half years, a deputy economy minister said.
“During the period 1,000 cases were referred to the judiciary for in-depth review,” Hadi Khani was quoted by SHADA news website as saying.
Khani said in the past several months some people tried to disrupt the forex market and were apparently involved in money laundering using foreign currency.
As usually is the case, he did not name names nor say what amounts were involved.
“So far 81 criminal dossiers are ready and offenders are awaiting their day in the courts.”
Khani said in identifying suspicious movement of money many organizations apart from banks, which are involved in the economic chain, like the bourse, insurance companies and industrial companies can and should assist the ministry’s Financial Intelligence Unit andthe High Council for Combatting and Preventing Money Laundering and Financing of Terrorism.
“There are an estimated 800 organizations and their subsidiaries that could help trace criminal financial activity. Our next step is how best to interact with these entities to prevent crime.”
Banks and credit institutions are required to set up special independent departments that must be included in the organizational chart of banks as a first-in-command operational unit, he noted.
Anti-money laundering departments are obliged to oversee all transactions conducted by banks and report dodgy deals and violations of AML rules to the CBI and other relevant bodies.
An amended AML Law was proposed by former president Hassan Rouhani in 2018 after it was studied by experts, namely the special committees in his government, parliament, the constitutional watchdog Guardians Council and the Expediency Council, the top arbiter.
The law was first ratified in February 2008 and over a decade of implementation it became abundantly clear that it must be updated and amended.
In August 2018, amendments to the CFT (Combating Financing of Terrorism) Law were approved by the Guardians Council and notified to the relevant organizations and ministries.
As per the law, banks were obliged to determine the potential of banking activity of each customer and place the information on a centralized data base.
Data is analyzed by supervisory bodies to determine if the transactions are within the scope of known levels or beyond the ceilings set for “potential banking activity” of each customer.
2 Groups of Customers
Based on the potential level, customers are categorized into two groups: natural entities who are jobless and legal entities that are financially inactive.
Accordingly, customer banking activity should not exceed levels set by the CBI based on the predetermined scope of activity otherwise they face money laundering probes.
For example, the maximum banking transactions for a retired Iranian is set at 20 billion rials in one year. Those under the umbrella of welfare organizations such as the Imam Khomeini Relief Foundation and the State Welfare Organization of Iran cannot have financial deals over 10 billion rials and an unemployed person who is not on pension can conduct transactions not more than 5 billion rials.
The rules, however, exempt unemployed customers who may have a regular stream of income from other sources, such as those who receive rent (from homes and shops given on lease) or those who make a living from interest on their savings.
In addition, after banks ascertain that a customer is commercially inactive or unemployed, they refuse to offer them some banking services, namely granting payment instruments such as online payment gateways and point-of-sale terminals. They also are not allowed to open commercial accounts or receive other financial assistance.
Non-active legal institutions are also subject to limits in line with measures to curb money laundering using sham companies.
In 2020 the CBI announced rules to improve oversight of banks. It said the measures, among other things, are to ensure anti-money laundering laws are upheld, curb tax evasion and speculation in the financial markets, namely forex and gold.
Due to money laundering concerns, the regulator last year barred banks from processing payment requests of customers lacking complete ID information stored in their special data center(s).
Prior to that the CBI set a daily cap for bank transactions. The rule came into effect in 2020 and transactions via inter-bank systems were limited to one billion rials per person per day. Last October it restricted daily transactions for clients under 18 years to a maximum 150 million rials.
As for other measures, the CBI compartmentalized individual and business accounts. It required individual customers to show documentary evidence for transactions above two billion rials at one bank in one day.
Customers should also state the reason for their transaction over the threshold when filling out bank forms. They need to also “provide documents to show that a transaction is for a valid business reason, concluding a contract or other acceptable purposes.”
