Economy, Business And Markets

New Measures to Counter Money Laundering

New Measures to Counter Money Laundering New Measures to Counter Money Laundering

Bureaux de change will get legal status by obtaining official permits from the Central Bank of Iran (CBI).  The director of CBI's regulatory and anti-money laundering office said the move is intended to bring the currency market under control, Financial Tribune sister website Eghtesad News reported on Monday.

Abdolhamid Arjmandnejad added that also as part of the plan, unauthorized bureaux de change will be banned in Ferdowsi Street in Tehran -- where most currency dealers are based -- in a step to intensify clampdown on money-laundering.

"Money laundering is not limited to one or two areas since it can happen anywhere and the foreign exchange market is one of them", Arjmandnejad said.

One example of misconduct in the currency market is reporting "inflated fees" for foreign goods, which have been preordered to be imported into the country, he added. "For instance, if a product is worth only $100, its price is declared $150  and hence $50 is taken out of the county with no goods supplanting it", he explained.

In Cohort   

Arjmandnejad went on to say that sometimes these financial scams are perpetrated in cohort with an overseas company which is often run by the same individual. "These instances of money-laundering lead to the flight of foreign currency which means profits for the criminals come at the cost of sabotaging the national economy".

When asked about currency dealings, Arjmandnejad noted that money laundering can also find its way into the foreign exchange market. "Money laundering is a secondary crime in that another shady practice precedes it and then if the proceeds from that practice flows into financial institutions, then a second felony has occurred", he maintained.

Toward Transparency

Arjmandnejad referred to Article 28 of the anti-money laundering law which states "buying or selling foreign currency outside the banking system or certified bureau de charges is illegal whether paid in cash or in the form of money transfer".  

Meanwhile he announced new measures to crack down on "illegal bureau de change" in collaboration with the police. "These bureaux de charge should get their act together before we will have to act against them and the people should be careful not to do business with them", he warned.

The CBI official asked bureau de charge owners to exercise caution in their transactions and reminded them of a series of rules to ensure transparency in their dealings. "Bureau de change owners must make it a point to identify their customers before doing business with them and  register all their ID information in SANA system so it can be retrieved upon request", he said.

He also announced that each bureau de charge would be required to appoint one of its employees as the person in charge of "anti money laundering affairs". He further announced a plan to launch training programs for bureau de charges to orient their staff with money laundering and ways to prevent it.

New Requests

The next issue for the CBI, Arjmandnejad said, would be to review about 10,000 requests to open new bureau de charges. "We'll be corresponding with these applicants to see if they are willing to meet our conditions", he said.

He reiterated that the clampdown on unauthorized foreign exchange centers would be intensified and street currency dealers will no longer be safe. "We will make it harder for them to stay in business so they will have to go mainstream or go bust", he said, acknowledging that the initiative would take time.