On 11 May 2018, the US and the UAE announced that they had jointly taken action to disrupt a currency exchange network that facilitated financing for the IRGC-QF.

The entities in question used their access to exchanges in the UAE to acquire US dollars that the IRGC-QF used to fund and arm its regional proxy groups. The network also involved front companies established to conduct financial activities on behalf of the IRGC-QF. Some of the individuals involved also forged documents to conceal their activities from UAE officials, and couriers were also used (possibly for the movement of funds).

Rashed exchange, one of the listed entities, is not on the UAE’s list of of moneychangers.

Analysis: Sanctions on the Iranian banking sector have likely forced much of the illicit financing for Iranian threat activity into the informal financial sector, meaning money services businesses, cash couriers, etc. This will likely continue to be the case for the foreseeable future, but it also means that interactions with the Iranian financial sector are most likely to happen through the MSB sector rather than the banking sector. Do MSBs have robust enough compliance regimes to deal with this?

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  1. […] from the use of the formal financial sector), IRGC-QF is known to have used front companies and MSBs in Dubai to finance its activities, and to use a number of financial officers to transfer money to […]

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Category

Compliance, proliferation, sanctions evasion, Uncategorized

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