February 14, 2020
Bahrain launched legal proceedings on Thursday against a number of individuals and businesses involved in a vast money laundering scheme linked to state-owned Iranian banks.
The operation allowed Iranian organizations, including some sanctioned for terror financing, to secretly move money internationally, the Kingdom’s prosecutors said.
Billions of dollars were funneled through Future Bank based in Bahrain, which was set up and controlled by Iran’s Bank Saderat and Bank Melli.
The defendants are charged with multiple offences under Bahrain’s anti-money laundering and banking laws, the state Bahrain News Agency reported.
Future Bank, which was shut down in 2016, engaged in “systemic and wide scale violations of Bahrain’s banking laws,” the Central Bank of Bahrain (CBB) said, referring to a 2018 report.
Further investigations found the bank, acting under the direction of Bank Saderat and Bank Melli, to have executed thousands of international financial transactions worth $7 billion while concealing the involvement of Iranian entities.
Staff deliberately removed information when transferring money via the SWIFT network – an illicit practice referred to as “wire stripping”.
Another technique involved a covert messaging service as an alternative to SWIFT, which concealed transactions from Bahraini regulators.
The years-long investigation by the CBB, the Ministry of Interior, and international regulatory experts, reviewed tens of thousands of Future Bank documents.
Rasheed Al-Maraj, the CBB governor said the complexity and magnitude of the investigations were compounded by the need to disentangle the subterfuge of Iranian-backed financing of terrorism.
“Bahrain is committed to full implementation of international standards in combatting money laundering and the financing of terrorism,” he said. “Investigating and prosecuting violations is an essential part of protecting the integrity of the international financial system.”
Bahrain’s public prosecution has referred the cases to Bahrain’s High Criminal Court, with further charges expected as investigations continue into thousands of remaining transactions.