Iran General NewsUS secretly met Iran banking officials

US secretly met Iran banking officials


AP: A U.S. official met secretly with Iranian banking officials and senior government aides who oppose punishing the Islamic nation for not doing enough to stop money laundering and terrorism funding, The Associated Press has learned. The Associated Press


WASHINGTON (AP) — A U.S. official met secretly with Iranian banking officials and senior government aides who oppose punishing the Islamic nation for not doing enough to stop money laundering and terrorism funding, The Associated Press has learned.

The talks last month in Paris took place despite the Bush administration’s near-absolute ban on formal U.S.-Iran contact. They also occurred against the backdrop of Tehran’s attempts to avert the imposition of new U.N. sanctions over its suspect nuclear program.

The United States co-chaired the meeting with Italy and was represented by Daniel Glaser, the Treasury Department’s deputy assistant secretary for terrorist financing and financial crimes, a senior U.S. official said. Representatives of several other nations also attended.

The meeting was part of the Bush administration’s attempts to ramp up international pressure on Iran to halt atomic activities that could lead to the development of nuclear weapons. The administration also wants Iran to stop its support for groups the U.S. has designated as terrorist organizations, the official said.

Iran was represented by senior officials from its central bank, known as Bank Markazi, and its government, according to a Middle Eastern diplomat familiar with the session. Officials spoke on condition of anonymity to describe confidential close-door discussions.

The Treasury Department confirmed late Friday that the meeting took place on Jan. 24 between the Financial Action Task Force, or FATF, and an Iranian delegation to discuss “Iran’s noncompliance with international standards to combat money-laundering and terrorist financing,” said Andrew DeSouza, Treasury Department spokesman. He said the meeting was initiated by FATA and that Glaser attended in his capacity as co-chair of a FATF working group overseeing this effort.

The talks took place around the time the U.S. ambassador to the United Nations, Zalmay Khalizad, was scolded for violating administration policy by appearing onstage in his official capacity with the Iranian foreign minister at a World Economic Forum conference in Switzerland.

The United States and Iran have had no diplomatic relations since the 1979 Iranian Revolution and the taking of hostages at the U.S. Embassy in Tehran. Formal contact between the two countries is extremely limited, although meetings have occurred, most recently between the U.S. and Iranian envoys to Iraq on security matters.

Several U.S. officials noted that the United States often participates in multilateral meetings with Iran, notably involving U.N. agencies of which Iran is also a member. Glaser is expected to attend a larger session of FATF later this month.

The circumstances of the most recent, smaller meeting were unusual, however. The session amounted to a hearing for Iran’s answer to international claims that it is complicit in money laundering and bankrolling terror.

The talks that Glaser co-chaired were held at the Paris headquarters of the FATF, a 34-nation body that deals with threats posed to the international financial system by money laundering and support for terrorism.

The task force issued a warning about Iran in October and is expected to consider further steps at the meeting later this month. Such measures could include a toughening of the October warning or placing Iran on an international financial blacklist of noncooperative countries that could cripple its ability to do business abroad.

There are currently no countries on the FATF noncooperative list, which has been used as a tool to press several nations, mostly small island states, to reform their banking sectors.

Iran is not a member of the FATF. Most of the world’s major economic powers belong to the organization, including China and Russia, which have traditionally opposed sanctions. Diplomats say Tehran has grown increasingly concerned about the effects of a U.S.-led push to isolate its economy.

That concern was behind its decision to send a delegation to Paris to block or blunt any new action the task force might take at its Feb. 24-29 board meeting, diplomats said.

The FATF’s Oct. 11 warning on Iran said the country’s lack of comprehensive regulations regarding money laundering and terrorism support was a “significant vulnerability” in the world financial system. Because of that risk, it advised banks in its member states to use “enhanced due diligence” in transactions with Iranian institutions.

Shortly after that, the Bush administration noted the FATF move when it announced it was expanding its own sanctions on Iran, which now include bans on dealings with state-owned Banks Sepah, Melli, Mellat and Saderat, and parts of the Revolutionary Guard Corps and Defense Ministry.

Since then, Washington has boasted that the U.S. and existing U.N. sanctions, along with the task force warning, have taken a significant toll on Iran’s economy, particularly on its unemployment and inflation rates, and raised pressure on the government.

“Both unemployment and inflation rates in Iran are on the rise, with independent experts estimating the unemployment rate to be roughly twice the 11 percent claimed by the regime,” Deputy Treasury Secretary Robert Kimmitt said last week.

In the Feb. 8 address, he also praised the FATF for “confirming the extraordinary systemic risks that Iran poses to the global financial system.”

Associated Press Economics Writer Jeannine Aversa contributed to this report.

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