Iran Has billions stashed in European banks, Malta included
about a year ago
- Sunday, 29 January 2012, 00:00
EU sanctions another Malta-based Iranian company
An Iranian senior economic adviser to the European Union, Mehrdad Emadi, said this week that the rogue state of Iran has several billions of euros stashed in European banks, Maltese banks included.
Speaking this week, Emadi said billions of euros remained in European banks – in Germany, Spain, Italy, Greece and Malta. The pronouncement comes following a statement by the Iranian Central Bank that the country did not have even a single rial in European banks, after the European Union announced a new raft of sanctions against the country over its nuclear development programme.
“Although I cannot name the exact sum right now, I can say that Iran still has more than a couple of billion euros in European banks,” he said.
The European Union banned imports of oil from Iran on Monday and agreed to freeze the assets of Iran’s central bank, joining the United States in a new round of measures. The new raft of EU sanctions also blacklists yet another Maltese shipping company, BIIS Maritime Limited, over its involvement in Iran’s nuclear programme.
Over the years, Iran has created an apparent web of shipping companies registered in Malta through which it sought to evade international sanctions (see below). But Mr Emadi’s statements this week and previous attempts by Iran to invest billions in the Maltese financial system show Iran’s interest in Malta stretches beyond the country’s shipping register.
Persian state sought to invest ‘billions’
in Malta’s financial system
The interests that Iran had in Malta’s shipping industry and its use of Malta’s ship register to circumvent international sanctions are widely known, but the Persian state’s billion-dollar interest in Malta’s financial system is another matter altogether.
WikiLeaks recently revealed how the government of Iran had made approaches to invest billions of euros in the Maltese banking system, a prospect the Maltese government had refused outright.
Two UK-based Iranian banks had also attempted to access Malta’s Central Bank euro payment system, which had left Maltese banking authorities in a quandary on how to politely say ‘no thank you’.
In a cable by Wikileaks, with the subject of Iran interested in “investing” in Malta, it was revealed how the Iranian government had been interested in investing “several billions of euros” in the Maltese banking system.
In February 2009, according to the cable, a senior official at the finance ministry, had informed the American embassy of an Iranian approach to the Maltese Ambassador to France to express interest in “investing several billion euros” in Malta.
In a subsequent meeting, the official shared the text of an email from the Maltese ambassador, a part of which follows:
“(The Iranian Ambassador to Paris) asked whether our Maltese banking system is autonomous or whether it is subject in any way to US or British control. I told him that we certainly adhered to EU rules, but he answered that that would not be a problem because France, for instance, is currently discussing the way to get Iran to invest €4 billion.
“He said that he would be very interested to know more about the structures of Malta’s banking system as eventually, if we are as sound as I made it seem and if we are not subject to US or British controls, Iran would seriously examine the possibility of investing money in Malta. I am not sure whether we are participating in some financial embargo and tried to avoid the question being asked directly to me.”
The official had instructed the ambassador to turn down the request, on the basis that Malta had no interest in pursuing such an investment.
The Maltese government had also agreed to deny requests by Iranian banks to establish a subsidiary, branch, or representative office in Malta, based on an MFSA determination that “nationals or institutions from Iran would not be considered by the MFSA as being fit and proper persons for the purposes of MFSA’s licensing criteria”.
One such request had been turned down in the past, the cable points out.
Attempts to access Malta’s euro
payment system
At the beginning of April 2008, then US Ambassador Molly Bordonaro met with finance ministry officials, where the ambassador had urged Malta not to allow Iranian banks to use Malta’s euro payment system.
The request came after an attempt to access Malta’s central bank euro payment system by two Iranian banks located in the United Kingdom − Melli Bank PLC, a wholly-owned subsidiary of Bank Melli Tehran, and Persia International Bank PLC, a subsidiary of Bank Mellat Tehran.
“As major European banks have moved to cut off or limit their ties with Iran,” the cable noted, “Iranian banks are likely to look to smaller but well-connected jurisdictions like Malta to meet their financial services needs.”
The cable went on to report: “The finance minister said Malta’s Central Bank and the MFSA were ‘unhappy’ about the Iranian attempt, and had immediately looked for ways to ‘block it’ but that there appeared to be no clear ‘legal mechanism’ for doing so since there seemed to be no EU sanctions on the banks in question.”
Shipping sanctions
The government has so far implemented the European Union’s and the United Nations’ sanctions against Iran. It has effectively frozen a number of companies’ assets and will prohibit them from using Maltese ports for shipping purposes, in the future.
The sanctions, as far as Malta is concerned, relate to some of the large number of Iranian shell companies incorporated in Malta for the purpose of masking ship and company ownership with a view to circumnavigating a slew of sanctions imposed by the United States, the United Nations and now the European Union over the Persian state’s nuclear controversial programme.
The sanctions effectively freeze all the funds and resources assets identified by the European Union as using Malta to covertly continue shipping operations in the face of multilateral sanctions being imposed on Iran.
The legal notice will also eventually prohibit the loading and unloading in Maltese territory cargo from vessels owned or operated by Islamic Republic of Iran Shipping Lines (IRISL).
The measure, however, will not come into force until October 2012.
In addition to the EU sanctions, United Nations and the United States have also imposed their own sanctions.
The United Nations Security Council believes that a number of ships owned by the Iranian state shipping line have been renamed and re-registered to new companies in order to avoid a number of UN resolutions, as well as separate sanctions imposed by the United States.
A number of press reports have implicated numerous such companies in Malta, and have cast a shadow on Malta’s company registration system.
A report published by the New York Times entitled “Web of shell companies veils trade by Iran’s ships”, just before the Security Council convened to decide on its first new wave of sanctions, implicated the use of the Maltese corporate structure in the scheme and sparked off a series of similar reports across Europe, the US and the rest of the world.
The reports accuse the Iranian national shipping agency of engaging in “corporate camouflage” to circumvent UN resolutions and US sanctions by replacing the ships’ Iranian flags with those of primarily Malta, Hong Kong and Germany, and of renaming the ships to disguise the identity of their original owners.
The US Department of the Treasury had designated a total of 37 front companies based in Malta, Germany and Cyprus and five Iranian individuals for being owned or controlled by, or acting for or on behalf of IRISL and its affiliates. Six companies incorporated in Malta and two Iranians with ties to those companies were listed.
The action targets IRISL’s “complex network of shipping and holding companies and executives and further exposes Iran’s use of its national maritime carrier to advance its illicit weapons of mass destruction (WMD) programme and to carry military cargoes,” the Treasury Department said.
An Iranian senior economic adviser to the European Union, Mehrdad Emadi, said this week that the rogue state of Iran has several billions of euros stashed in European banks, Maltese banks included.
Speaking this week, Emadi said billions of euros remained in European banks – in Germany, Spain, Italy, Greece and Malta. The pronouncement comes following a statement by the Iranian Central Bank that the country did not have even a single rial in European banks, after the European Union announced a new raft of sanctions against the country over its nuclear development programme.
“Although I cannot name the exact sum right now, I can say that Iran still has more than a couple of billion euros in European banks,” he said.
The European Union banned imports of oil from Iran on Monday and agreed to freeze the assets of Iran’s central bank, joining the United States in a new round of measures. The new raft of EU sanctions also blacklists yet another Maltese shipping company, BIIS Maritime Limited, over its involvement in Iran’s nuclear programme.
Over the years, Iran has created an apparent web of shipping companies registered in Malta through which it sought to evade international sanctions (see below). But Mr Emadi’s statements this week and previous attempts by Iran to invest billions in the Maltese financial system show Iran’s interest in Malta stretches beyond the country’s shipping register.
Persian state sought to invest ‘billions’
in Malta’s financial system
The interests that Iran had in Malta’s shipping industry and its use of Malta’s ship register to circumvent international sanctions are widely known, but the Persian state’s billion-dollar interest in Malta’s financial system is another matter altogether.
WikiLeaks recently revealed how the government of Iran had made approaches to invest billions of euros in the Maltese banking system, a prospect the Maltese government had refused outright.
Two UK-based Iranian banks had also attempted to access Malta’s Central Bank euro payment system, which had left Maltese banking authorities in a quandary on how to politely say ‘no thank you’.
In a cable by Wikileaks, with the subject of Iran interested in “investing” in Malta, it was revealed how the Iranian government had been interested in investing “several billions of euros” in the Maltese banking system.
In February 2009, according to the cable, a senior official at the finance ministry, had informed the American embassy of an Iranian approach to the Maltese Ambassador to France to express interest in “investing several billion euros” in Malta.
In a subsequent meeting, the official shared the text of an email from the Maltese ambassador, a part of which follows:
“(The Iranian Ambassador to Paris) asked whether our Maltese banking system is autonomous or whether it is subject in any way to US or British control. I told him that we certainly adhered to EU rules, but he answered that that would not be a problem because France, for instance, is currently discussing the way to get Iran to invest €4 billion.
“He said that he would be very interested to know more about the structures of Malta’s banking system as eventually, if we are as sound as I made it seem and if we are not subject to US or British controls, Iran would seriously examine the possibility of investing money in Malta. I am not sure whether we are participating in some financial embargo and tried to avoid the question being asked directly to me.”
The official had instructed the ambassador to turn down the request, on the basis that Malta had no interest in pursuing such an investment.
The Maltese government had also agreed to deny requests by Iranian banks to establish a subsidiary, branch, or representative office in Malta, based on an MFSA determination that “nationals or institutions from Iran would not be considered by the MFSA as being fit and proper persons for the purposes of MFSA’s licensing criteria”.
One such request had been turned down in the past, the cable points out.
Attempts to access Malta’s euro
payment system
At the beginning of April 2008, then US Ambassador Molly Bordonaro met with finance ministry officials, where the ambassador had urged Malta not to allow Iranian banks to use Malta’s euro payment system.
The request came after an attempt to access Malta’s central bank euro payment system by two Iranian banks located in the United Kingdom − Melli Bank PLC, a wholly-owned subsidiary of Bank Melli Tehran, and Persia International Bank PLC, a subsidiary of Bank Mellat Tehran.
“As major European banks have moved to cut off or limit their ties with Iran,” the cable noted, “Iranian banks are likely to look to smaller but well-connected jurisdictions like Malta to meet their financial services needs.”
The cable went on to report: “The finance minister said Malta’s Central Bank and the MFSA were ‘unhappy’ about the Iranian attempt, and had immediately looked for ways to ‘block it’ but that there appeared to be no clear ‘legal mechanism’ for doing so since there seemed to be no EU sanctions on the banks in question.”
Shipping sanctions
The government has so far implemented the European Union’s and the United Nations’ sanctions against Iran. It has effectively frozen a number of companies’ assets and will prohibit them from using Maltese ports for shipping purposes, in the future.
The sanctions, as far as Malta is concerned, relate to some of the large number of Iranian shell companies incorporated in Malta for the purpose of masking ship and company ownership with a view to circumnavigating a slew of sanctions imposed by the United States, the United Nations and now the European Union over the Persian state’s nuclear controversial programme.
The sanctions effectively freeze all the funds and resources assets identified by the European Union as using Malta to covertly continue shipping operations in the face of multilateral sanctions being imposed on Iran.
The legal notice will also eventually prohibit the loading and unloading in Maltese territory cargo from vessels owned or operated by Islamic Republic of Iran Shipping Lines (IRISL).
The measure, however, will not come into force until October 2012.
In addition to the EU sanctions, United Nations and the United States have also imposed their own sanctions.
The United Nations Security Council believes that a number of ships owned by the Iranian state shipping line have been renamed and re-registered to new companies in order to avoid a number of UN resolutions, as well as separate sanctions imposed by the United States.
A number of press reports have implicated numerous such companies in Malta, and have cast a shadow on Malta’s company registration system.
A report published by the New York Times entitled “Web of shell companies veils trade by Iran’s ships”, just before the Security Council convened to decide on its first new wave of sanctions, implicated the use of the Maltese corporate structure in the scheme and sparked off a series of similar reports across Europe, the US and the rest of the world.
The reports accuse the Iranian national shipping agency of engaging in “corporate camouflage” to circumvent UN resolutions and US sanctions by replacing the ships’ Iranian flags with those of primarily Malta, Hong Kong and Germany, and of renaming the ships to disguise the identity of their original owners.
The US Department of the Treasury had designated a total of 37 front companies based in Malta, Germany and Cyprus and five Iranian individuals for being owned or controlled by, or acting for or on behalf of IRISL and its affiliates. Six companies incorporated in Malta and two Iranians with ties to those companies were listed.
The action targets IRISL’s “complex network of shipping and holding companies and executives and further exposes Iran’s use of its national maritime carrier to advance its illicit weapons of mass destruction (WMD) programme and to carry military cargoes,” the Treasury Department said.
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