Uncategorised

Bahrain takes banks to court over US$1.3 billion laundry

Chris Hamblin, Editor, London, 25 May 2021

articleimage

The largest money-laundering case in the history of Bahrain has begun, with the public prosecution service referring the Central Bank of Iran and 12 other Iranian banks to court for their alleged involvement in money-laundering operations in 2008-12.

In an illustrated memo on its website, the prosecutorial service also mentions the offences of "responding to Central Bank of Iran instructions" and "circumvention of international sanctions."

It also mentions Future Bank - a commercial bank rather than a private one which closed its doors in 2016 after Bahrain cut diplomatic ties with Iran - saying that "the physical evidence proves that Future Bank has implemented banking transactions using an unapproved transfer system by instructions of the Central Bank of Iran."

Some, if not most, of the other banks on the prosecutor's list are private banks, including Bank Melli Iran and Bank Saderat Iran, which formed Future Bank as a joint venture with Ahli United Bank, another wealth manager. Neither Bank Melli nor Bank Saderat had any spokespeople in London who could be reached by press time.

The prosecutorial website, however, is very clear in its allegations: "The Attorney General indicated that the investigations...were carried [out] pursuant to reports of the Central Bank of Bahrain and violations it monitored through its audit processes. The review of tens of thousands of documents followed, confirming that Future Bank and its controlling shareholders were involved in systematic and widespread violations of Bahrain’s banking law, with the aim of laundering money through a bank controlled by the National Bank of Iran (Melli) and Bank Saderat Iran, empowering Iranian entities, including those involved in financing terrorism or subject to international sanctions designed to prevent them from carrying out international banking transactions."

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes