Clashes Reported in Tehran as Riot Police Target Money Changers

 

By Thomas Frdbank

New York Times

Clashes erupted in the center of the Iranian capital on Wednesday between money changers and security forces after riot police on motorcycles used batons and tear gas to shut down a long-tolerated black-market for foreign currency, witnesses reported.

It was the first instance of a violent intervention over the money-changing business in Tehran since the national currency, the rial, which has been gradually losing value in recent years, dropped drastically over the past week, losing 40 percent of its worth against the dollar, to a record low. Economists have called the rial’s plunge a stark reflection of the economic pain in Iran caused in part by the Western sanctions on Iran’s disputed nuclear program.

Witnesses in and around Manoucheri Street, where the black-market money changers do business, described cat-and-mouse chases between motorized riot police and money changers. It was unclear whether there were injuries or arrests. It also was unclear whether the clashes had been confined to the immediate area or had spread.

The violence came a day after President Mahmoud Ahmadinejad, in a nationally televised news conference, asked Iranian citizens not to sell their rials for other currencies, suggesting the problem had been caused in part by speculators.

Mr. Ahmadinejad also warned that a “band of 22 people” with the power to manipulate exchange rates could face arrest, and he accused the United States and unspecified “domestic allies” of waging a psychological war on the country.

As the clashes erupted on Wednesday, garment and jewelry merchants in the city’s main bazaar, less than a mile away, closed their shops, apparently in protest. The semiofficial Mehr news agency said the bazaar, the heart of Tehran’s commercial center, had been closed for “security reasons.”

The secretary-general of the Tehran Bazaar and Trade Union, a powerful official close to the government, accused unspecified outside instigators of pressuring  bazaar merchants to close their shops. The official, Ahmad Karimi Esfahani, was quoted by the Iranian Labor News Agency as saying that most merchants had wanted to remain open for business. “Those now present are trying to show the bazaar as closed,” he was quoted as saying. “They are guided by foreigners.”

Other bazaar traders hinted that the closure of the bazaar was organized by powerful opponents of Mr. Ahmadinejad, who were trying to make him look weak by closing down Tehran’s most popular shopping center.

Members of Parliament and Shiite Muslim clerics have been calling for an end to the black-market currency trade, accusing the money changers of driving down the rial’s value. Others have called upon the government to buy up rials and sell dollars and other foreign currencies warehoused in the central bank’s reserves to restore stability to the national currency.

In the last weeks, traders and regular citizens had gathered by the hundreds on Manoucheri Street in Tehran to buy foreign currencies in anticipation of further weakening in the rial.

During the past months some Iranian leaders and clerics have warned against social unrest over the worsening economic malaise in the country. The fall in the currency’s value has presented Iran with enormous economic risks, including the possibility of starting a severe bout of inflation, which is already high. A rising sense of economic crisis in Iran could also pose new political challenges for the country’s leaders.

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US levies new sanctions on Iran’s Central Bank

By Julie Pace
St. Louis Tribune

In In a fresh swipe at Iran, President Barack Obama has ordered new sanctions on the Islamic republic, including its Central Bank, moving to enforce a law he signed in December.
In a letter to Congress Monday, Obama said more sanctions are warranted "particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks." He said the problems included the hiding transactions of sanctioned parties, the deficiencies of Iran's anti-money laundering regime and the unacceptably high risk posed to the entire international financial system posed by Iran's activities.
The Central Bank sanctions were included as an amendment in the wide-ranging defense bill Obama signed into law at the end of 2011. The White House said Obama signed the executive order approving the sanctions on Sunday.
The new measures come as the White House tries to both ratchet up pressure on Tehran to abandon its nuclear program and dissuade Israel from launching a unilateral strike on Iran, a move that could roil the Middle East and jolt the global economy.
Obama said Sunday that he does not believe Israel has yet decided whether to attack Iran. The president said he still believes a diplomatic solution is possible.
Iran insists its nuclear pursuit is for peaceful purposes, but the West accuses Iran of developing the know-how to build a nuclear bomb. Defense Secretary Leon Panetta last week would not dispute a report that he believes Israel may attack Iran this spring in an attempt to set back the Islamic republic's nuclear program.
In recent weeks, both the U.S. and European Union have imposed harsher sanctions on Iran's oil sector, the lifeblood of its economy.
In Washington, the Senate Banking Committee easily approved yet more penalties on Tehran last week. The sweeping measure, which is not yet law, would target Iran's Revolutionary Guard Corps, require companies that trade on the U.S. stock exchanges to disclose any Iran-related business to the Securities and Exchange Commission, and expand penalties for energy and uranium mining joint ventures with Tehrana fresh swipe at Iran, President Barack Obama has ordered new sanctions on the Islamic republic, including its Central Bank, moving to enforce a law he signed in December.
In a letter to Congress Monday, Obama said more sanctions are warranted "particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks." He said the problems included the hiding transactions of sanctioned parties, the deficiencies of Iran's anti-money laundering regime and the unacceptably high risk posed to the entire international financial system posed by Iran's activities.
The Central Bank sanctions were included as an amendment in the wide-ranging defense bill Obama signed into law at the end of 2011. The White House said Obama signed the executive order approving the sanctions on Sunday.
The new measures come as the White House tries to both ratchet up pressure on Tehran to abandon its nuclear program and dissuade Israel from launching a unilateral strike on Iran, a move that could roil the Middle East and jolt the global economy.
Obama said Sunday that he does not believe Israel has yet decided whether to attack Iran. The president said he still believes a diplomatic solution is possible.
Iran insists its nuclear pursuit is for peaceful purposes, but the West accuses Iran of developing the know-how to build a nuclear bomb. Defense Secretary Leon Panetta last week would not dispute a report that he believes Israel may attack Iran this spring in an attempt to set back the Islamic republic's nuclear program.
In recent weeks, both the U.S. and European Union have imposed harsher sanctions on Iran's oil sector, the lifeblood of its economy.
In Washington, the Senate Banking Committee easily approved yet more penalties on Tehran last week. The sweeping measure, which is not yet law, would target Iran's Revolutionary Guard Corps, require companies that trade on the U.S. stock exchanges to disclose any Iran-related business to the Securities and Exchange Commission, and expand penalties for energy and uranium mining joint ventures with Tehran

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at http://www.launderingmoney.com/ and on twitter at : http://twitter.com/#!/LaunderingMoney http://moneylaunderingworld.blogspot.com/   and http://launderingmoney.com/

US to name Iran area of 'money laundering concern'

The U.S. Treasury Department plans to designate Iran as an area of "primary money laundering concern" on Monday, a U.S. official said, a move allowing it to take steps to further isolate the Iranian financial sector.
The decision was reported earlier by ABC News and the Wall Street Journal. The newspaper said the Treasury would not formally sanction Iran's central bank, in part to avoid causing a sudden shock to oil prices.
Under Section 311 of the U.S. Patriot Act, such a designation allows the United States to take a range of "special measures" against a jurisdiction as a whole, an institution, a class of transactions or a type of account.
It was unclear what exact steps the Treasury planned for Iran but it seemed unlikely it would seek to cut off the Iranian financial sector entirely, a move that could disrupt the global energy markets and harm the U.S. economic recovery.
The decision -- which the official said was to be announced by Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner on Monday -- appeared designed as a warning about the risks of dealing with Iran's financial institutions.
It follows a Nov. 8 report by the U.N. nuclear watchdog that presented intelligence suggesting that Iran had worked on designing an atomic bomb and may still be secretly carrying out related research.
That report, calls by U.S. lawmakers to sanction Iran's cental bank and media speculation of a possible Israeli strike against Iran's nuclear sites have all pushed the Obama administration to look for tougher sanctions against Tehran.
The Obama administration suspects that Iran is pursuing a nuclear weapons capability under cover of its civilian atomic energy program. Tehran denies this, saying it has no interest in nuclear arms and its atomic program is purely peaceful.
The United States is also expected to unveil sanctions against Iran's petrochemical sector on Monday, sources familiar with the matter said on Friday, and European nations are expected to follow suit.

RELUCTANCE TO DISRUPT OIL MARKETS

According to the U.S. Treasury website, the United States has previously designated three jurisdictions as of "primary money laundering concern" -- Myanmar, Nauru and Ukraine. When applied to a specific institution, such a designation can have devastating consequences. In 2005, the United States designated Macau-based bank Banco Delta Asia as a primary money laundering concern because of its dealings with North Korea. When the United States later allowed BDA to return more than $20 million in frozen assets to North Korea, it had great difficulty finding a bank to carry out the transfer because most feared losing access to the U.S. financial sector.
The range of "special measures" permitted under U.S. law appears to give the Obama administration fairly wide latitude on how to tailor any restrictions. According to the 2003 designation of Myanmar, which the U.S. government refers to by its colonial name Burma, such steps can allow the Treasury to obtain more information about the designated jurisdiction, better monitor transactions with it or bar U.S. financial institutions from dealing with it.
U.S. officials say there has been a debate within the Obama administration about whether to formally sanction the Iranian central bank, which many importers of Iranian crude oil use to clear their transactions.
Despite calls for such sanctions by Democratic and Republican lawmakers, U.S. officials been reluctant to do so because of the fear that this could cause oil prices to spike higher, potentially impairing the U.S. recovery.
There is also a concern that importers of Iranian oil -- which include such nations as China and India -- could be hurt by such a move, thereby antagonizing nations whose support the Washington needs if it is to pursue wider sanctions on Iran.
The U.S. decision to take unilateral steps to sanction Iran reflects the difficulty of persuading Russia and China to punish it further at the U.N. Security Council, where they hold vetos and have supported four previous sanctions resolutions.

Michael Hearns an Anti Money Laundering specialist with over 24 years of AML experience can also be found at www.launderingmoney.com and on twitter at : http://twitter.com/#!/LaunderingMoney