Nigeria Puts Iran On Money Laundering High-Risk List
Nigeria has put Iran on its high-risk list over money laundering, cautioning banks and financial institutions about transactions with the regime.
Nigeria has put Iran on its high-risk list over money laundering, cautioning banks and financial institutions about transactions with the regime.
The Central Bank of Nigeria, in a statement, urged deposit money banks and other financial institutions in the country to increase monitoring of transactions involving businesses and individuals from Iran, as well as several other countries. The statement noted that the "Democratic People's Republic of Korea, Iran, and Myanmar remain on the list of high-risk jurisdictions, subject to 'Call for Action'." The central bank added that enhanced due diligence should be applied, and in severe cases, countermeasures may need to be implemented to safeguard the international financial system. Banks were urged to stay vigilant and be aware of any risks associated with transactions involving the listed countries.
The decision follows the Financial Action Task Force (FATF) plenary held in late June, which maintained Nigeria on its grey list and Iran on its blacklist due to Tehran's failure to comply with global regulations. Nigeria's action can be seen as a step to improve its standing with the FATF and move away from the grey list.
The Paris-based Financial Action Task Force is an inter-governmental organization that sets international standards for combating money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction (WMD). The FATF blacklist does not entail formal sanctions, but financial institutions typically redirect their resources and services away from blacklisted countries to avoid complications.
Nigeria was placed on the grey list in February and has since taken several measures to address the strategic deficiencies in its financial system in collaboration with the FATF. A recent statement from the Nigerian Financial Intelligence Unit indicated that Nigeria's efforts have led to a reduction of the identified deficiencies from 84 to 15.
Nigeria is Iran's third-largest trading partner in Africa, and President Muhammadu Buhari has expressed readiness to expand relations with Iran. Buhari stated, "I have interacted with Iranians over many years, especially when I was the petroleum minister, and understand the country and its people. I, therefore, welcome the strengthening of relations between our countries, as we have complementarities, especially in energy production."
With a population exceeding 213 million, Nigeria is the most populous country in Africa. Its gross domestic product (GDP) surpassed $440 billion in 2021, making it the largest economy in Africa. However, its GDP per capita is approximately half that of Egypt and one-third of South Africa.
Data from the Iranian Industry, Mining, and Trade Ministry reveals that the value of trade between Iran and Nigeria increased from $5 million in 2019 to $18 million in 2020, and exceeded $130 million in 2021.
In 2013, Nigeria's State Security Service accused a local Shiite cleric, Mallam Abdullahi Mustaphah Berende, of leading a terrorist group backed by Iran that was plotting to assassinate Nigerian officials and attack Israeli and American targets in Nigeria.
Unlike his predecessor Hassan Rouhani, President Ebrahim Raisi and his hardliner supporters do not favor accession to the FATF. However, compliance with FATF requirements is essential for Iran to gain full unfettered access to the global financial system, even if Western sanctions are lifted. Raisi has suggested that his government may prioritize relations with "neighbors and friendly countries," including China and Russia.
Critics of FATF have argued that accession would expose Iran to US sanctions and limit its ability to support proxy forces like Hezbollah in Lebanon, which are designated or considered terrorist organizations. However, experts note that failure to resolve the FATF issue would be detrimental to Iran's international economic relations, even with China. FATF is a multilateral organization, and its financial transparency rules apply regardless of whether a country trades in US dollars or not.
Iranian Foreign Minister Hossein Amir-Abollahian made the claim in an interview with Chinese TV channel Phoenix following Thursday's UN Security council’s session to discuss Iran’s nuclear advancements and its arms supply to Russia as well as Tehran joining the Shanghai Cooperation Organization (SCO).
“In the past several weeks, Iran has started talks with three countries of Germany, France and England,” he said, noting that “talks started in Norway and recently continued in Abu Dhabi, in the United Arab Emirates.”
Amir-Abollahian expressed hope that these talks are aimed at overcoming “misunderstandings,” paving the ground for the Islamic Republic and the E3 countries (France, UK and Germany) for “better interaction and cooperation.”
What the top Iranian diplomat described as “misunderstandings” are the implementation of the UN resolution 2231, which endorsed the 2015 nuclear deal. As part of the defunct agreement, UN sanctions imposed on the regime over its ballistic missile program are set expire in October, but the three European parties of the accord argue that Iran has violated the pact, therefore the sanctions should remain in place.
They base their argument on evidence that proves Iran is supplying weapons for the Russian invasion of Ukraine – on which Iran should have coordinated with the UN Security Council – and on IAEA reports that prove Iran is stockpiling highly-enriched uranium beyond the levels allowed in resolution 2231.
Amir-Abdollahian did not mention the drone supplies to Russia but Iran has maintained an ambivalent approach about its military dealings with Moscow. While it keeps repeating claims that Iran supports peace in Ukraine, it argues that the drones were sold to Russia before the invasion began, despite colossal amounts of evidence, including multiple Iranian Shahed drones shot down over Ukraine. In the latest development, satellite imagery indicates that the regime has also set up a drone manufacturing line in Tatarstan Republic to jointly produce the drones with Russia.
Western navies have also seized multiple shipments of Iranian arms in the Persian Gulf waters apparently destined for Houthis in Yemen, including in one instance missile and drone parts, in violation of existing UN sanctions.
At the same time, Rosemary DiCarlo, Under-Secretary-General for Political and Peacebuilding Affairs, said that during the Security Council’s session on Thursday, Iran and the Russian Federation claim there was no evidence linking the intercepted vessel and its cargo to Iran, and no clear indication that the seized components were of Iranian origin.
Amir-Abollahian's remarks also followed a phone call with the EU’s foreign policy chief Josep Borrell who warned the Iranian foreign minister against arms supplies to Russia. The European Union, multiple European countries and the United States have been warning Iran against supplying weapons to Russia since its Shahed Kamikaze drones were deployed by Moscow last year against civilian and military targets in Ukraine. So far, Russia has launched hundreds of these loitering munitions, mostly against infrastructure and centers of population.
Iran's FM also said in the interview that the Ebrahim Raisi administration is following two courses of action simultaneously to deal with the sanctions. “The first path is to try to neutralize the sanctions and the other path is to try to cancel the sanctions using the tools of diplomacy and negotiation. We move in both directions,” he said.
According to Iran International sources, regime security organizations including the Supreme National Security Council, have identified sensitive and strategic gas stations vulnerable to riots and conducted security drills in the middle of the night.
In November 2019, a government decision to increase fuel prices by 50–200 percent triggered a cycle of protests and unrest across the country that lasted for over two weeks. During this time, angry protesters and suspected government provocateurs torched hundreds of gas stations, banks, and government buildings.
One of the main reasons that the Islamic Republic has not managed to increase prices in the midst of the current economic crisis is its being engrossed in the worst wave of unrest in years following the death in custody of Mahsa Amini in September. Fuel price rises risk fanning the flames of unrest further.
The regime, which has one of the world's largest oil and gas reserves, sells gasoline at extremely low, subsidized prices, charging less than 10 US cents per gallon, or less than 3 cents per liter, while neighboring oil-producers have much higher prices, in line with international market rates. Second only to Venezuela, Iran has the world’s cheapest gasoline price.
For years there has been talk of adjusting prices, but since 2018 Iran’s currency has dropped 12-fold and any increase needs to be huge to be meaningful in US dollars.
As part of the new plan, which has been piloted in a number of small cities, citizens are still allowed to buy 60 liters (15.8 US gallons) of gasoline per month at the cheap price of 15,000 rials per liter, or less than 3 US cents. The new regulation reportedly caps the more premium gasoline at 150 liters (40 gallons) per individual per month.
There are conflicting reports about the timing or the exact details of the new plans with unconfirmed reports that the new regulations will take effect gradually and some others claiming that there will not be any cap on the more expensive gasoline.
Hossein Aghayan, a former director of the supply department of the National Iranian Oil Refining and Distribution Company, said a major worry for the regime now is controlling the supply chain to prevent lines forming at gas stations across the country.
In addition to extremely low prices that do not encourage saving fuel, Iran also faces gasoline and diesel shortages due to a lack of refining capacity. The low prices also lead to millions of liters of fuel being smuggled out of Iran daily, part of a large-scale global smuggling network.
Iran’s heavy subsidies for fuel and electricity cost the country at least $50 billion a year, while the government struggles to secure foreign currencies amid US economic sanctions.
In March, Iran International revealed a classified document outlining the proceedings of a meeting at the presidential office in late February which revealed that strategic fuel reserves being at a dangerously low level, forcing major repairs at refineries to be delayed allowing maximum production for the time being. Officials were told to avoid any public remarks or suggestions that could be interpreted as an intention to raise current fuel prices for fear of inflaming public discontent.
While the country is hugely dependent on the revenues from crude oil exports, due to sanctions and mismanagement, it has failed to modernize the energy sector in general, with power shortages most of the year. Systemic corruption also further cripples the weak system. The situation has been grave in recent years but since the administration of Ebrahim Raisi assumed office in 2021, the entire energy management system is going haywire even faster, drawing backlash from not only the public but even regime officials.