Dirty Money; Another Obstacle to Iran’s Non-Joining FATF

Iran's regime ranks the world’s top money laundering risk

For many years, dirty money has been exchanged in the Iranian market, and many corrupt officials have used this opportunity to line their pockets from the people’s property.

In November 1995, the government executed Fazel Khodadad on charges of embezzlement estimated at 123 billion tomans. Khodadad was the first economic criminal who was executed after the 1979 revolution.

However, his partner Morteza Rafiqdoust, thanks his brother’s influence, escaped from the death penalty and received a life sentence. The commander of the Revolutionary Committee in Saad Abad branch and the brother of the Revolutionary Guards (IRGC)’s founder was finally released from prison after eight years alone. The court later concluded that the sentence was excessive and life in prison was unfair for Rafiqdoust.

In April 1998, Iranian media outlets reported that the Mayor of Tehran Gholamhossein Karbaschi had been arrested on corruption charges. In July 1998, Karbaschi was convicted of corruption and misuse of funds and began serving a two-year sentence in May 1999.

However, in January 2000, Khamenei agreed to decree his amnesty. The former economic criminal is now the General Secretary of Executives of Construction Party.

In 2001, Iran’s society had shocked by the revelation of another corruption case. Shahram Jazayeri, 24, was taken into custody for a long list of criminal activities involving bribery, illegal exports, forgery and massive embezzlement of state money and assets.

He had paid about $15,600,000 to the Iran Supreme leader’s brother Hadi Khamenei, and about $5,800,000 to former Majlis speaker Mehdi Karroubi without requesting anything in return.

In February 2007, Jazayeri escaped thanks to the intervention of several influential clerics who had a vested interest in covering up his scandals.

In September 2011, citing “nervous disease” as the cause, the former CEO of Meli bank Mahmoud Reza Khavari delivered his resignation. A little later, he along with his family fled to Canada and he became renowned as a fugitive embezzler.

The photos of Khavari in shop stores, casinos, restaurants, and his expensive palace in Canada are still circulated in cyberspace and quickly emerge in Google search.

In late 2013, during the era of former president Mahmoud Ahmadinejad, Babak Zanjani was arrested on a charge of withholding $7 billion of Iran’s oil revenue.

He was supposedly involved in helping the government bypass international sanctions. In the interim, he had made a fortune for himself. “My crime is circumventing the sanctions,” Zanjani said in his legal defense at the court.

Apart from individuals, there’s not one sector that has remained untouched by the impact of systemic corruption in Iran. In this context, the government apparatuses have formed many corruptions under the pretext of “financial and credit institutions.”

Over recent years, many corruption cases have been revealed regarding these institutions that have firm ties with powerful organs in the government such as the IRGC. The Cultural Cooperative Fund, Sarmayeh [capital] bank, and Caspian credit institutions are the most famous corporations, which have recorded mind-blowing figures in plundering.

 Nevertheless, Iran’s denial of joining the Financial Action Task Force (FATF) shows officials’ eagerness for a non-transparent economy and continuation of underground transactions.

Smuggling Commodity Equivalent to 62 Percent of Iran’s General Budget

Regardless of corrupt individuals and corporations, the annual turnover of smuggling commodities in Iran reaches about $25 billion. This figure was previously announced by the staff of the counter-smuggling of goods and currencies. This amount is almost equal to 300 trillion tomans.

Last November, President Hassan Rouhani declared that the total budget of Iran is around 450 trillion tomans, which means the value of smuggling commodity is equivalent to two-thirds of the country’s general budget.

Iran’s Tax Affairs Organization estimated the tax evasion between 30-40 trillion tomans. It is worth reminding that this amount is about half of the budget for treatment and health.

The function of bank stocks in 2018 shows that the Saderat bank has registered capital of 17.535 trillion tomans. The Tejarat bank has also registered capital of 22.392 trillion tomans. In other words, tax evasion in Iran is equivalent to the capital of two major Iranian banks.

Furthermore, Director General of Anti-Money Laundering Office of Tax Affairs Ali Khani previously told the IRNA news agency that there are around 500 million bank accounts in Iran.

However, the population of Iranian people is only 80 million. He expressed his concerns about this alarming number of bank accounts, which have created a huge capacity for corruption. More than four-fifth of these accounts called “rental,” which are used for turnover by fraudsters.

These days, the dimension of financial corruption by rental accounts has extended to online fraud. Official sources announced that more than 70 percent of cybercrimes consist of online fraud of band accounts, which has caused distrust among the people and disrupted online purchases.

Iran’s cybersecurity forces declared that the interception of online fraud is too difficult due to fraudsters’ usage of rental accounts. Notably, most complainants cannot get back their assets.  

FATF opponents are concerned about their own interests

In such circumstances, Iranian politicians are arguing about the most essential means of countering corruption. In the 1980s, the hazardous spread of money laundering in the world prompted the international community to join efforts to counter dirty money transfers.

Eventually, in 1989, the world established an intergovernmental organization in this respect, which is known as the Financial Action Task Force (FATF).

Today, most countries have either joined the FATF or are implicitly abiding by its rules. This organization consists of 37 fixed members that are mostly developed countries.

In addition, the Gulf Cooperation Council and the European Union are considered FATF fixed members. Only Iran and North Korea haven’t joined this global organization so far.

FATF opponents in the Iranian regime argue that joining the body will prevent the country from bypassing sanctions. On the other hand, proponents reason that those are not passionate about the transparent economy and have interests in non-transparent transactions object to joining the FATF.

Iran's accession to this financial institution will shed light on all deposits and withdrawals in its banking network. This organization will quickly identify and block all suspicious banking transactions, which will create a huge disadvantage for several parties.

FATF Deters Huge Corruptions

The Head of Foreign Investment Center of Tehran Chamber of Commerce Ferial Mostofi said that joining the FATF would accompany many impacts on removing smuggling and money laundering in the country.

She underlined that transparency in the banking system will cause a reduction in financial corruption. “This financial institution became important among the world’s banks after the 9/11 event and all financial systems around the world reached a certain standard. Joining these bills is now a requirement for all nations' banking systems.

“Adoption of these standards is essential for the financial system of any country to be able to interact with [foreign] financial systems and banks. Therefore, joining these bills is also a must for our country, especially in the current situation. Otherwise, we would not be able to have interactions with other countries in the world and Iranians’ Bank accounts will be closed across the globe,” Mostofi cited.

The lack of transparency in Iran is one of the reasons for growing corruption and dirty money inside the country. The accession to FATF could play a key role in leading the country to transparency.

Corruption in the Archives’ Rooms

Another essential tool in controlling corruption in the world is the electronic government. This apparatus makes all documents and transactions of the administrative structures electronic and shares them with other institutions of the country.

In addition, it makes it possible to publish documents publicly, and transparency greatly reduces the possibility of abuse. However, in Iran, paper documents and confidential letters remain in priority and the information of each organization is kept in the archives of the organization itself, which lays the groundwork for corrupt practices.

However, creating a transparent system is impossible in Iran while the highest officials involved in major corruption cases.


Read more:

Another Retreat by Iran from Implementing the FATF

Nuclear - Terrorism

Iran Is Testing the World’s Will With Its Centrifuges

On December 18, Iranian President Hassan Rouhani during his visit to Malaysia said that his country is running much faster and more advanced model centrifuges to enrich more uranium, all...
Read more

Iran’s Fourth Step in Breaching the Nuclear Deal; Aggression or Inevitable?

Wednesday, November 6, spokesperson for the Atomic Energy Organization of Iran (AEOI) Behrouz Kamalvandi announced that Iran has taken the fourth step in breaching the 2015 nuclear deal, formally known...
Read more

Iran Takes Its Fourth Step to Reduce JCPOA Commitments, EU Announces Concern Over Iran’s Move

Iran will take the fourth step to scale down its undertakings under the 2015 nuclear deal with world powers by injecting gas into 1,044 centrifuges at Fordow fuel enrichment plant...
Read more

Human Rights

A Look at the Iran Regime’s Human Rights Record in 2019

The killing of 1500 protesters on the streets with light and heavy weapons within three days. The detainees were subjected to intense physical, mental and psychological torture. The detainees were held...
Read more

Iran’s Coronavirus Prison Riots Are Causing Chaos for the Regime

Prison riots and protests because of the coronavirus have become a major phenomenon in Iran over the past ten days. Since the Iranian New Year (Nowrouz), prisoners in at least nine...
Read more

Nowruz Congratulatory Message from Iranian Political Prisoner Majid Assadi

  On the dawn of Friday, March 20, the Iranian people celebrated Nowruz as an ancient tradition for beginning the new year of the Persian Calendar. As a national ritual, many...
Read more

Middle East

Iran’s Regime Panics Over US Military Movements in Iraq

The recent US military actions in Syria and Iraq against the Iranian regime's proxy terrorist groups have caused panic among the heads of the regime’s Revolutionary Guards (IRGC), its officials...
Read more

Iran’s Khamenei Rudely Claws to Re-Dominate Iraq

On March 8, Iraqi people, particularly women and girls, honored the international women’s day by holding widespread demonstrations in several provinces including Babylon, Baghdad, Dhi Qar, and Basra. Demonstrations were held...
Read more

Who Is Abdulaziz Al-Mohammadavi, the New Head of Iran-Backed Militias in Iran?

At dawn on January 3, Abu-Mahdi al-Muhandis, fugitive deputy commander of Iran-backed militias in Iraq, was killed along with the commander of the Iranian regime’s Revolutionary Guards Quds Force (IRGC-QF)...
Read more

Analysis & Policy

Iran: There Is No Lesser Evil Anywhere in the Leadership

By INU Staff INU - President Hassan Rouhani won his second term last month. He was up against Ebrahim Raisi (the candidate preferred by Supreme Leader Khamenei). However, Rouhani’s election has...
Read more

Iran: Rouhani Faces Attacks on All Sides

Iranian President Hassan Rouhani is facing mounting pressure at home and abroad which, according to Reuters, may affect his ability to run the country. Reuters notes that Rouhani, who was re-elected...
Read more

Power Struggles Make Iran's Regime Unstable

Although many believed that Supreme Leader Ali Khamenei was preparing conservative cleric Ebrahim Raisi to be his heir by placing him in the presidency, the election results gave Hassan Rouhani...
Read more

Iranian Opposition

Maryam Rajavi’s New Year Message

Almost two weeks ago, Maryam Rajavi, the leader of the Iranian opposition and the President-elect of the National Council of Resistance of Iran (NCRI) sent a message to the Iranian...
Read more

Iran Regime’s Anti-MEK Hit Pieces 

The Iranian regime has funded yet another hit piece against the People’s Mojahedin Organization of Iran (PMOI/MEK) – this time about its leader Massoud Rajavi - but it was met...
Read more

Iran Intensifies Its Fake News Campaign

By Colonel (Retired) Wes Martin The Mujahedin-e Khalq (MEK) is the most-lied to and lied about the organization in the World.  This legacy is further engendered by recent The Intercept article, “Defectors Tell of...
Read more


Iraqi Women Roar Against the Mullahs and Their Mercenaries

On February 15, Iraqi women and girls in Dhi Qar, Basra, Babylon, Maysan, and several other provinces held widespread demonstrations against Moqtada al-Sadr, an Iran-backed Shiite cleric. They demonstrated their wrath...
Read more

105 Women Executed Under Rouhani

Two women were executed in Shiraz and Mashhad last week, bringing the total number of women executed during the reign of supposed moderate Hassan Rouhani to 105. Many human rights organizations...
Read more

Iran: Women Have to Support More Than Three Million Families

In the past ten years, the number of Iranian single mothers has increased by 58 percent. This phenomenon is taking place while statistics show at least three million single mothers...
Read more


Iran’s 2020–21 Budget Is a Genuine Dilemma

On December 8, the administration of Iranian President Hassan Rouhani published the 2020-2021 budget bill, triggering a new round of infighting among Iranian officials. Significantly, Rouhani’s allies and opponents agree that...
Read more

New Evidence Emerges of Rampant Corruption in Iran’s Oil and Export Markets

By Edward Carney On Tuesday, IranWire published an article that attached a dramatic figure to the closely-related issues of Iran’s escalating economic crisis and the corruption of entities in both the...
Read more

Iran’s export to Iraq drop by 50%

By INU Staff INU - Iraq has significantly reduced its imports from the Iranian Regime in the past month, according to an economic-focused newspaper published in Tehran. The report notes that part...
Read more


Terzi: EU Must Increase Pressure on Iran and Hold Zarif Accountable

Iranian foreign minister Javad Zarif is expected to attend the Munich Security Conference on Friday, although he may well miss the event, as he did with the World Economic Forum...
Read more

US Treasury Designates Iranian Shipping Network Helping IRGC and Houthis

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated an Iranian shipping network smuggling lethal aid to Yemen from the Iranian Revolutionary Guards Corps-Qods Force (IRGC-QF)...
Read more

US Steps Up Sanctions Pressure on Iran

Behzad Pourqanad, a smuggler of the Iranian government, has been sentenced to 46 months in prison for illegally exporting carbon fiber from the United States to Iran. In a statement Thursday,...
Read more


An Inevitable Confession to the Killing of Children in Iran’s November 2019 Uprising

The secrecy and the scandal of minimizing of the statistics related to deaths during the November 2019 uprising in Iran that the regime still insists on fearing a social explosion...
Read more

Iran: Situation in Prisons Becomes Increasingly Tense 

Since the news of the Coronavirus outbreak in Iran, Iranians all over the country are concerned about the way the regime is managing the situation. Or rather, the way it...
Read more

A Week of Prison Riots in Iran 

A riot broke out in Tabriz Central Prison, Iran, on Monday night, following claims on the regime’s state TV that all but the most dangerous prisoners there had been released.  The inmates,...
Read more

Latest INU tweet


Latest News

Estimating Support for the...

US Raises Concerns After 1000...

NCRI-US Reveals New Details...

Ayatollah ‌BBC Repeats Lies...

Iran: Protesters handed harsh...

Rubio asks for Justice...