US official: Be wary of Iranian financial deals
Shefali Rekhi
456 words
11 May 2007
Straits Times
English
(c) 2007 Singapore Press Holdings Limited
ASIAN banks and financial firms should be wary of dealing with Iranian institutions that could be using deceptive means to channel funds for the country's nuclear programme, a senior US official said.
Iran has been defiantly pursuing the programme despite a UN Security Council resolution to suspend uranium enrichment, said Mr Stuart Levey, the US Treasury's Under Secretary for terrorism and financial intelligence.
'Because they are so committed to it, they have been engaging in deceptive practices,' he said, talking to The Straits Times on Wednesday.
Mr Levey was here as part of a regional tour, which also took him to Japan and Malaysia, to apprise banks and financial institutions of the deceptive practices being adopted by the Iranian government.
The effort is part of a campaign developed by US Treasury Secretary Henry Paulson to support UN efforts to limit Iran's nuclear programme and support for terrorism.
The campaign was launched in September last year. According to a report in the Washington Post, it has been successful in limiting Iran's ability to finance petroleum industry projects and has affected its imports.
The report says it has also limited Iran's use of the international financial system to help fund allies and extremist militias in the Middle East.
So far, Iran's traditional banking system was with Europe, Mr Levey said.
But those relationships are getting increasingly constrained with many European banks and financial institutions cutting back or stopping transactions with Iran.
Consequently, chances are increasing that the Iran could increase its dealings with Asia.
'Singapore is a growing regional financial centre and for all the reason that makes Singapore attractive for legitimate business, there are also vulnerabilities to make it attractive for those who do not act legitimately,' he said, adding that his department was sharing the necessary information with banks and financial institutions here.
Two of the Iranian institutions that have raised concern - either because of their links to nuclear proliferation activities or support of terrorism - are Bank Sedarat and Bank Sepah.
'Just in the last five years we saw over US$50 million (S$76 million) going from Iranian central bank through Bank Sedarat's subsidiary in London to Beirut to terrorist organisations there,' he said.
In one instance, one of the Iranian banks had asked one of the financial institutions to remove its name from international transactions to avoid detection.
These are the kinds of activity that threaten the 'integrity of the financial system', Mr Levey said.
'And because financial systems are global, I think banks all over the world need to be aware of these kinds of risks so that they can try to protect against them.'