Home News Terrorism How the IRGC Launders Money for the Iranian Regime’s Dangerous Projects

How the IRGC Launders Money for the Iranian Regime’s Dangerous Projects

The Islamic Revolutionary Guard Corps (IRGC) has been accused of engaging in terrorism activities by various countries and international organizations.

Iran’s Revolutionary Guards (IRGC) not only controls a significant portion of the country’s banking and financial markets but is also deeply involved in money laundering for the Iranian regime. The IRGC’s lack of transparency and accountability makes it difficult to track its illegal revenue and expenditures. Their opaque practices extend to the point where they do not even report to the regime’s government or parliament, a clear indication of money laundering.

Undoubtedly, a significant portion of Iran’s monetary and non-monetary economy is under the control of the IRGC. The revenues generated from these sources are more than 1.5 times the current budget allocated for the regime’s classic army. Despite this, one may question the lack of transparency regarding the IRGC’s revenues.

The reason for the lack of transparency regarding the IRGC’s revenues can be traced back to the organization’s founding purpose. As stated in the constitution, the IRGC was created with the aim of safeguarding the revolution and its accomplishments. However, over time, this duty became intertwined with the notion of “exporting the revolution,” leading to complications.

Exporting the revolution incurs substantial financial expenses, which include funding paramilitary groups and intervening in the internal affairs of other nations like Iraq, Lebanon, Syria, Palestine, Yemen, and more. These costs are not covered by the general budget of the country and are instead financed by undisclosed resources.

Due to the growing intricacy of global banking and financial regulations and the significance of anti-terrorism laws after the 9/11 attacks, it has become unfeasible to fund these projects through traditional government channels. Consequently, the revenues and expenditures related to these projects had to be carried out beyond the government’s purview.

Furthermore, starting from the Rafsanjani era, the regime has pursued a project aimed at attaining nuclear capabilities, with the ultimate objective of acquiring a nuclear weapon. This has played a substantial role in posing a threat to global powers while, at the same time, imposing exorbitant costs on the Iranian populace to ensure the regime’s survival.

The atomic bomb project’s covert nature, spanning over a decade, prevented the regime from accessing the required funds through conventional means. Consequently, the regime had to rely on illicit channels to finance this project.

The IRGC overcame any hindrance posed by Western countries’ monetary systems and sanctions by resorting to hostage-taking, terrorist attacks, and assassinations. Notable instances include the bombing of the US Marine barracks in Beirut and Hezbollah’s kidnapping of French citizens in Lebanon in the 1980s.

After the People’s Mojahedin Organization of Iran (PMOI) and the National Resistance Council of Iran (NCRI) exposed the regime’s bomb-making project, the West imposed sanctions on the regime, primarily due to activities carried out by the IRGC.

Due to the exceptional escalation of banking and financial sanctions during the Ahmadinejad era and before the signing of the Joint Comprehensive Plan of Action (JCPOA), also known as the “Iran Nuclear Deal,” as well as after the US’s withdrawal from the JCPOA in 2018, the regime suffered a significant loss of financial resources, including its oil revenues.

The IRGC experienced a severe setback to its enormous yearly budget, which it obtained from the government, in addition to a considerable portion of its earnings from oil, gas, and petrochemicals.

Consequently, the IRGC was compelled to augment its unlawful operations, such as drug trafficking, necessitating the laundering of illegal profits to gain entry into the global and domestic banking systems. As a result, the IRGC’s money laundering activities underwent an unprecedented level of intensity and expansion.

To avoid having its financial and banking system added to the FATF blacklist, the regime executed several tactics, including passing the “Counter Financing of Terrorism Act” (CFT) in the regime’s parliament. The bill was later rejected by the Guardian Council, a body controlled by the supreme leader Ali Khamenei, which oversees legislation passed by the parliament.

However, when it came to two bills aimed at countering organized crime (Palermo) and the bill to join the Convention for the Suppression of Financing Terrorism, there was a sudden halt. Despite extensive discussion and negotiation, these two bills were not agreed upon due to the fear of the IRGC’s collapse.

In November 2019, Gholamreza Mesbahi-Moghadam, a member of the Expediency Discernment Council, stated that if the bills concerning money laundering were approved, all of the IRGC’s activities would be classified as money laundering. By joining these conventions, the Americans would become aware of what the regime was doing, whom they were collaborating with, and the means by which they were doing so.

Former officials of the regime have commented on the involvement of the IRGC in money laundering. Hassan Rouhani, a former regime president, stated that “when there are drugs, there is also dirty money. This dirty money goes somewhere, meaning money laundering takes place in some corner.”

Similarly, the regime’s former foreign minister Mohammad Javad Zarif admitted that “many in Iran benefit from money laundering,” and those who gain billions of dollars from it have the financial power to create propaganda against anti-money laundering laws.

In July 2019, Ali Moayed, the head of the campaign against the smuggling of goods and currency in Iran, revealed that there were “nearly six million bank accounts in Iran related to smuggling and money laundering activities.”

Despite the secretive nature of IRGC’s money laundering operations, a few incidents have been reported such as the IRGC’s money laundering network discovered in Bahrain in 2011, the disclosure of $5 billion money laundering for the IRGC in India, and the $5 billion money laundering case through Bahrain’s Future Bank B.S.C. in 2019. These cases are among the rare instances that have been disclosed.

The regime has been ranked by the Wall Street Journal and the Basel Institute as the world’s most high-risk country for money laundering for three consecutive years, a situation that remains unchanged.

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