Iranian Sanction-busting Money Transfer Websites Target AMEX, Visa, MasterCard

Yesterday, the U.S. sanctioned Iran’s remaining 18 banks from the SWIFT financial messaging network in a move designed to cover the entirety of the financial sector. While the focus on banks is welcome, a broad designation will also degrade more under-the-radar and innovative sanction-busting schemes, which are continuing to finance Ayatollah Khamenei’s terror apparatus.

Iran is relentless in its pursuit of foreign capital, whether by blackmailing European leaders into ill-conceived trade mechanisms to skirt sanctions or by devising ways to undermine them in small but effective ways. Earlier this year, the U.S. Department of Justice indicted the leaders of an Iranian financial services firm, PAYMENT24, for allegedly facilitating unlawful commerce using PayPal, forged documents, and Visa gift cards. This went on for nearly a decade and funneled millions of dollars into Iran. With that scheme now broken up, another more ambitious effort must be addressed.

United Against Nuclear Iran (UANI) has been tracking the use of an online payment and exchange platform, Iranicard, that has potentially exposed U.S. financial institutions to sanctions violations. Iranicard is only the most well-known of these schemes: Iranian sanctions-avoiding websites are rife. Leading credit card issuers such as Visa, MasterCard and American Express, as well as fintech firms like PayPal and Skrill, have been targeted.

Iranicard’s clients include multiple sanction-designated entities and other entities of concern, including many companies with links to the Islamic Revolutionary Guard Corps (IRGC) – a Foreign Terrorist Organization – which controls at least one-third of Iran’s economy, including businesses worth a combined $28 billion and 15 to 25 percent of the Iranian stock market.

Iranicard is unambiguous that it seeks to “…look for new loopholes every day in order to break the international sanctions.” The shadowy operation is yet another troubling escalation of a relentless campaign to uphold Ayatollah Khameini’s “resistance economy” principle, which calls for circumventing sanctions by any means necessary.

If left unchecked, we should expect Iranicard and its clones to prise open throughways to SWIFT transactions, international remittances, and the fraudulent provision of international credit cards, while providing safe passageways for IRGC-affiliated companies to access restricted international markets. Such an outcome would be disastrous to the global effort to curb terror financing and protect international banking. It would demonstrate to bad actors everywhere the ease by which trusted institutions can be undermined, if only with a little creativity.

The private sector and governments are often guilty of neglecting schemes like Iranicard, but this is a major mistake. We cannot focus solely on responding to stunts like the one Iran engineered with Venezuela. The world could only watch as officials piled nearly 9 tons of gold — an amount equal to about $500 million — on Tehran-bound jets earlier this year as payment to its long-time ally for the first-ever deliveries of Iranian oil to Caracas. Though less than the $400 million in cash the U.S. sent the regime by cargo plane in 2016, and less than the value of the PAYMENT24 and Iranicard schemes, every banknote and gold bar arriving on the tarmacs of Tehran can be expected to finance terror and the continued development of an illegal nuclear weapons program. None of it is acceptable.

Yesterday’s action will not only protect the integrity of global banking but should also help to shutter these smaller subversive schemes that today have a free hand undermining sanctions and degrading U.S. national security.

This post was co-authored by Claire Jungman, chief of staff at United Against Nuclear Iran (UANI).

About the Author
Daniel Roth is Director of Research at United Against Nuclear Iran (UANI) in New York. He leads UANI’s business intelligence and corporate engagement efforts.
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