Screen Shot 2016-04-28 at 04.38.45

by: Emanuele Ottolenghi

Of the 166 companies currently registered, Iranian nationals own 84, or 52.5 percent. There are also 9 companies created by Iranians who use passports acquired through a citizenship-by-investment program from the island nation of St Kitts and Nevis – the same citizenship used by the three sanctioned individuals to register most of their companies. Together, over 60 percent of Poti Free Zone registered entities can be traced back to Iranian ownership.

There is even a support network for these businesses. Farsi-speaking business incorporation services promoting the Free Zone are located nearby, in the southern Georgian port of Batumi, to help Iranians establish a foothold on the Black Sea. Consulting firms that promote Iranian investment in Georgia, as well as help Iranian nationals acquire a foreign passport, are also for hire.

Iranian interest in Poti is best explained by the 10,000 trucks that yearly transit Georgia between the shores of the Black Sea and the border crossings in Armenia and Azerbaijan. Trains also transport containers from Poti to Baku – whence merchandise can then easily reach Iran through the Caspian Sea. And now with Iran increasing transit fees for Turkish trucks and Turkey retaliating, much of that traffic is being rerouted to Georgia. Tehran is vigorously promoting bilateral ties, through its large diplomatic mission in Tbilisi and a consulate in Batumi, an embassy-managed school in the capital, exchange programs for Georgian students in local universities, and a branch of Ahl-ul Bayit, the religious foundation affiliated with Iran’s Supreme Leader.

Nor has the end of the visa-free regime significantly diminished Iranian business activities. Though Iranian businessmen admit that banking remains difficult, Iranian companies can keep business operations going by remote control from Tehran or through proxies. For example, Dolatzadeh’ s company in Tbilisi is owned by another company in Istanbul. A visit to the Istanbul company offices revealed that it is actually a residential property rented to two Cameroonian citizens who, according to local management, have not paid rent for six months and have not been seen for weeks.

For Dolatzadeh and many others, Georgia appears to be an excellent, cost-effective jurisdiction to channel financial transactions between Europe and Asia, or even procure nuclear technology. It is close to Iran, and it is far from the prying eyes of Western capitals and their intelligence services. And nobody seems to be paying attention.

Emanuele Ottolenghi is a Senior Fellow at the Foundation for Defense of Democracies in Washington DC. He recently spent two weeks in the South Caucasus investigating Iran’s illicit financing and proliferation activities there.

Image: Wikimedia Commons/ec tech3/CC by-sa 3.0

Source: http://www.nationalinterest.org/feature/how-iran-skirting-sanctions-the-southern-caucasus-11852?page=2