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Bahrain to Prosecute 13 Iranian Financial Institutions on Money Laundering Charges

In the largest such case in Bahrain’s history, the Gulf state’s public prosecutor on Wednesday announced that the Central Bank of Iran and 12 other Iranian banks, most notably Bank Melli Iran (National Bank of Iran) and Bank Saderat Iran (Export Bank of Iran) will be tried on charges of money laundering in a scheme valued at $1.3 billion.

Ali Al Buainain, the Bahraini attorney general, said that “Bank Melli Iran and Bank Saderat Iran used Future Bank to transfer $1.3 billion, using an alternative system that was not licensed by Bahraini authorities and was not subject to them, and these funds were kept, settled and laundered in order to evade international sanctions against Iranian entities and personalities.”

The case goes back to April 30, 2015, when the Central Bank of Bahrain ordered the closure of Future Bank and the confiscation of all its records to investigate alleged money laundering offenses. Future Bank was established in Bahrain in 2004 as a joint venture of Ahli United Bank and the two Iranian state-owned banks named by the attorney general.

The Public Prosecution continued to investigate and Bahraini courts issued several prison sentences to officials, some Bahraini and others Iranian, in addition to fines totaling more than $345 million.

The case took more than six years to probe, in cooperation with several international investigators, Interpol and others.

A source in the Bahrain Public Prosecution told The Media Line “the investigation proved that the transfer orders were issued by several banks, most notably the Central Bank of Iran.”

The investigation revealed that Future Bank “was also exploited by the attempts to transfer money to Iran and to finance several terrorist entities, but this did not happen due to the strict controls imposed by Bahraini authorities on banks,” he added.

“Several issues were brought to light, and the funds were in many cases confiscated. All the entities that the bank dealt with secretly were revealed, most notably the Iranian Revolutionary Guard, the Lebanese Hizbullah organization, and other entities in Iraq,” the source said.

“There are other investigations that are still underway regarding many of the similar violations that were carried out through Future Bank and Iranian banks, to find out who specifically is responsible, where and when this was done, and where these funds went, and it is expected that there will be more defendants in this case,” the prosecution source said.

“Tens of thousands of Future Bank documents were reviewed, which confirmed that Future Bank and its controlling shareholders had been involved in numerous violations of the law to launder money for the National Bank of Iran and Bank Saderat Iran and that, because of this, these Iranian entities involved in financing terrorism and subject to international sanctions were able to do so,” he said.

The violations of the law included “carrying out international banking transactions by adopting illegal means with the intention to transfer funds and avoid regulatory scrutiny to avoid disclosure.”

Saad Rashid, a Bahraini political analyst, told The Media Line that “Iran took advantage of its good relations with Bahrain at the beginning of the new millennium and established Future Bank, which was a front for illegal transactions.”

“Bahraini authorities placed the bank under supervision since its inception, as is the case for all banks, but they tightened control over it specifically, and all crimes committed by the bank, those responsible for it and through it the Iranian government have been exposed,” he said.

“Such crimes cannot be tolerated, and certainly more details will come out later. Money laundering cannot be permitted, especially if the issue is related to financing terrorist groups,” Rashid said.

Such crimes cannot be tolerated, and certainly more details will come out later. Money laundering cannot be permitted, especially if the issue is related to financing terrorist groups

Adnan Mohammed, a Bahraini banking expert, told The Media Line that “Bahraini authorities impose strict supervision on banks, meaning it is not easy to carry out money laundering in Bahrain.”

“Future Bank used an internal system through the internet and the funds were not passed through the transfer network approved by the authorities in Bahrain. As a consequence, this raised the suspicion of the Bahraini authorities, and all details were followed up and disclosed in full,” he explained.

Mohammed demanded that “the names of all those involved in the incident be disclosed to the entire world, to find out how this was done.”

He said that Bahrain was the first country to adopt international decisions issued to prevent money laundering, combat terrorism financing and dry up its sources.

“All the Iranian officials who oversaw the bank’s operations, in addition to all their collaborators in Bahrain, must be brought to justice, and all methods used by Iran to launder money to the world should be exposed,” Mohammed said.