Activists Meet Canadian MPs to Address Iran Issue

During the international sanctions of the first half of the 2010s and the US sanctions imposed since 2018, Iran faced restricted access to the international banking system. To circumvent these limitations, it relied on an extensive network of so-called ‘trust companies’ and foreign exchange outlets.

Through these channels, Iran covertly transferred proceeds from its sales of crude oil, petroleum, and petrochemical products worldwide for a range of purposes, including funding its proxies.

The Revolutionary Guards (IRGC) and its global oil laundering network are heavily involved in establishing and operating such clandestine networks.

These complex networks usually operate in the United Arab Emirates, Turkey, Singapore, Hong Kong, Iraq, Malaysia, Cyprus and Malta, as well as some Western countries as indicated by the US Treasury’s sanctions lists.

Last week a controversy over Tehran Mayor Alireza Zakani’s secretly concluded agreement with a Chinese construction firm to import transport and traffic surveillance equipment, worth nearly two billion euros, opened a pandora box that included, among other things, inadvertent references to the use of trust companies.

Under fire from critics who said the Chinese company, Poly Changda Overseas Engineering (PLCD), was ill-equipped for procurement of the equipment needed by the city, the mayor and his supporters argued that the agreement would help funnel back the funds accrued in China.

The funds, they said, could otherwise not be repatriated due to global sanctions that have blocked Iran's access to the international banking system so this was a “golden opportunity” that had to be urgently utilized.

As professional enablers of financial secrecy, trust companies also orchestrate the crude oil sales to overseas buyers while concealing its origins and the involvement of the Iranian government by rebranding products and falsifying documents.

Trust companies registered abroad, which represent the interests of the Iranian government and sanctioned entities, report their ownership by unrelated, nominal parties. They are often given vast legal powers to be able to administer and manage the financial assets of the beneficiary, that is the Iranian government, including accepting payments from buyers of Iranian oil and using it to make purchases on its behalf.

To prove the association with these entities and individuals with the Iranian government is very hard or even impossible. In many cases the trustees are not even Iranian nationals.

The role and influence of these intermediaries declined somewhat after the 2015 JCPOA nuclear deal with the West, which allowed oil revenues to be repatriated through the official banking system.

The situation changed when in 2018 the Trump administration withdrew from the JCPOA and re-imposed oil export sanctions on third parties and Iran’s banking system. Subsequent attempts by the Biden administration to restore the agreement have failed.

Those in favor of a nuclear deal with the United States in Iran have always accused their opponents of profiteering from sanctions-busting operations and dubbed them as “sanctions profiteers”. This is mainly because IRGC circles organize the secret financial networks, which can manipulate oil exports and money laundering to enrich themselves.

Officials of the government of President Ebrahim Raisi often boast of their success in circumventing sanctions that has provided enough foreign currency to the Islamic Republic to survive.

The country is now exporting nearly 1.5m barrels of oil per day most of which goes to China whereas it could barely export 200,000 bpd after the full re-imposition of US sanctions in 2019.

The government’s recent budget bill shows that it is currently outsourcing some of its oil sales to military and religious entities, and real persons representing them, rather than selling it through the National Iranian Oil Company (NIOC) which according to the Iranian Constitution should have a monopoly in oil exports.

Whistle-blowers have revealed some cases in which the trustees of the government amassed the funds being paid into their accounts for some time but later delayed payments to the government, using the funds for their own investments, or embezzling billions of dollars.

During his high-profile corruption trial in 2019, for instance, the former CEO of Mellat and Parsian banks, Ali Divandari, said one such company used to bypass sanctions operating out of the United Arab Emirates had moved around $70b for the bank. He accused several other individuals of embezzlement, one of whom he said had fled Iran with 220m UAE dirhams.

“It was not possible to register our names in trust companies because these companies were foreign and would be exposed if this was done,” he told the court.

The Iranian government is unable to take legal action against the trustees in these circumstances due to the secrecy involved in such operations.

In relation to the latest controversy and rising to Mayor Zakani’s defense, hardliner lawmaker Malek Shariati revealed in a tweet on May 3 that the anti-sanctions committee of the secretariat of the Supreme National Security Council (SNSC) had secretly blessed the deal.

Referring to the Chinese company as a “trust company”, Shariati said in response to one of the critics, former Communications Minister Mohammad-Javad Azari-Jahromi, that the Chinese side of the agreement was to provide access to hard currency for imports of basic goods, medicine and other things including subway cars and buses.

The lawmaker also argued that disclosing the contents of the SNSC’s directive would be “treason”. Zakani himself had earlier protested to the disclosure of the company’s name by a whistle-blower and claimed that the Chinese side may decide to withdraw from the agreement due to the failure of the Iranian side to preserve its anonymity.

Azari-Jahromi’s counterargument was a brusque reference to the case of the oil tycoon Babak Zanjani as a reminder of the massive corruption often involved in such clandestine financial dealings.

Zanjani sold Iran's oil in the oil black markets through a host of “trust companies” and banks in various countries such as the Malaysia-based International Safe Oil (ISO), Dubai-based Sorinet Commercial Trust Bankers (SCT Bankers), and Malaysia-based First Islamic Investment Bank (FIIB) he had established.

He was sentenced to death in 2016 for withholding $2.7bn of the proceeds of oil sales. His request for clemency was approved by Supreme Leader Ali Khamenei last week and his sentence was commuted to twenty years in prison.

Zanjani is likely to be freed soon as he has served almost half of the twenty-year sentence. Authorities claim he “cooperated” in locating his assets abroad, which he had refused to do until now, and the assets were recovered to pay all his debts to the government.

This after Tehran's city council chairman and members disclosed plans for the construction of a cultural center within the park, one of the largest in Tehran, on Sunday.

Images circulating online showing the fenced areas, approximately 3,000 square meters in size, have intensified concerns about construction within this green space.

This plan follows another controversy sparked by plans to construct a mosque in Gheytarieh Park, a park in the north of the city.

Critics denounced that project as either a misuse of public funds or driven by hidden motives, including the expansion of Basij militia bases stationed at the parks.

Speaking to reporters this weekend about Laleh Park, Mehdi Chamran, chairman of the City Council of Tehran, defended the decision despite the area already being fenced off, with no official detailed information about the proposed building released so far.

Chamran cited a need for such projects post-Ramadan and assured that "no trees would be felled," arguing that people should wait for the presentation of the city’s plan.

Tehran City Council member Soudeh Najafi revealed she received informal information from the municipality about plans for a cultural center in the fenced area.

Expressing skepticism about the municipality's claims of having no role and no trees being cut, she questioned, "Does it mean that there are no trees in this large fenced area of about 3,000 meters?"

Echoing Nafafi's concerns, another city council member, Mahdi Eghrarian took to social media to voice his concerns, sharing a video and tagging Tehran's mayor and hardliner politician Alireza Zakani on the platform X, stating: "Noble people of Tehran: A group of colleagues of the council are against the marginal actions of Alireza Zakani and we will not allow the execution of trees in Laleh Park. It is wrong to build a cultural center at the cost of destroying trees and green spaces."

Some experts, including Mohammad Darvish, have also voiced concerns, citing potential illegality in altering the park's use.

The environmental expert told Rouydad24 news website that Tehran's per capita green space in parks and gardens falls short by about 4 square meters compared to the standard.

He argued for Tehran's dire need for green spaces, emphasizing the importance of maintaining current park areas. With only 16 square meters of green space per capita compared to the 25 square meters standard, any reduction in greenery would worsen the city's environmental and mental health challenges.

“This is illegal and under no circumstances should the people of Tehran, Iranian Department of Environment, Natural Resources Organization of Tehran City Council should not allow Tehran Municipality to make such a gross mistake,” Darwish said.

Legally only 3% of the area of parks can be changed for purposes such as toilets and cultural centers, and Laleh Park has reached capacity in this regard, he argued.

While Tehran’s municipality has claimed to have planted 636 hectares of trees within the city over 30 months, Darwish raised doubts about the figure – calling for transparency and verification of the claims.

With recent backing from figures such as Hassan Nowrozi, a member of Iran’s parliamentary legal and judicial commission, advocating for tree removal to facilitate mosque construction in parks like Gheytarieh Park, the future of Laleh Park hangs in uncertainty.

Non-compliant pharmacies risk facing legal consequences, as stated by Heidar Mohammadi during a briefing at the Presidential Communications Center on Monday. However it is not clear if the official was referring to violations by pharmacy staff or customers.

Mohammadi emphasized that the organization was among the pioneers in enforcing the mandatory hijab, leading to the implementation of specific dress code regulations within pharmacies. Describing non-compliance as a "deviation," he noted that "compliance with norms" is crucial for pharmacies to maintain their quota allocations.

“If a pharmacy fails to adhere to the norms, it will initially receive a warning. Should the warning prove ineffective, more severe deterrent measures will be executed. Continuous non-compliance will lead to legal actions against the violators,” Mohammadi added.

The food and drug administration of Iran, which oversees the policies and guidelines for a wide range of products including drugs, food, and medical devices, introduced hijab mandates for female pharmacy staff in August 2021. The mandates, which were reinforced in February 2023, require all female employees to wear a black veils among other dress code rules.

In the wake of the 2022 Woman, Life, Freedom protests triggered by the death of Mahsa Amini in police custody, several pharmacies were sealed across various Iranian cities for failing to comply with the regulations.

The protests highlighted widespread discontent with mandatory hijab laws among other issues related to women's rights in the country.

Sparked by new tax legislation passed by the Iranian parliament, the protest began in Tehran's bazaar on April 28 and has quickly escalated into a nationwide movement.

Videos obtained by Iran International show that Islamic Republic agents have sealed the shops of protesting gold jewelers in the religious city of Mashhad on Monday.

The primary grievance driving the strike is the reactivation of the Comprehensive Trade System coupled with the introduction of a Capital Gains Tax.

These measures are part of the government's broader economic strategy to streamline market operations and enhance regulatory oversight, claims President Ebrahim Raisi's administration.

However, the implementation has not been smooth, with gold and jewelry business owners expressing concerns. The new system mandates that all manufacturers and sellers, both wholesale and retail, must register their transactions, a requirement that has exacerbated anxieties within the sector over potential financial burdens.

The discontent among gold merchants intensified Sunday, as protests continued in cities like Shiraz, Yazd, Isfahan, Mashhad, Urmia, Zanjan, Qom, and Ardebil.

In a related but separate event, merchants in Bandar Abbas also held demonstrations to protest the recent hike in the value-added tax (VAT) rate, which was increased from 9% to 10% at the start of the current Iranian year in March 2024.

Experts have voiced concerns that the tax increases, which are passed on to consumers, might further fuel inflation, which has already reached an annual rate of over 50%, as reported by the Central Bank of Iran.

Their remarks mainly target the government's handling of issues related to compulsory hijab and financial misconduct. They question why individuals like Tehran Friday Prayers Imam Kazem Sedighi, who confessed to appropriating a $20-million land in Tehran, remain unprosecuted and at large.

However, many such critics, fearing reprisal, opt to direct their criticism not at the Supreme Leader, but towards other officials, such as Judiciary Chief Gholamhossein Mohseni Ejei, appointed by Khamenei, who is perceived as merely executing the Supreme Leader's directives.

The most prominent cleric speaking about corruption was Grand Ayatollah Abdollah Javadi Amoli , who warned the government, or in fact Khamenei, that "the problem of hijab cannot be solved using bayonets."

Speaking about the violent crackdown on Iranian women who defy compulsory hijab, Javadi Amoli said teasingly: "Adjusting the headscarf to cover more of the hair does not guarantee chastity and will certainly not prevent financial corruption."

Meanwhile, Khabar Online website quoted the ayatollah as having said in an older tweet: "Sometimes people write to me and ask why I do not say anything about the hijab." He continued that the problem of hijab cannot be solved with harsh measures. "The only thing that kind of measures can do is to encourage people to adhere to the appearance of the hijab rules. Otherwise, the problem remains unresolved."

In another development, Jamaran news website quoted Muslim scholar Ayatollah Yadollah Douzdouzani Tabrizi as having said in reference to the land grab by Tehran Friday Prayer Imam Kazem Sedighi who apologized to Khamenei for his wrongdoing: "We cannot make such mistakes and simply apologize to make it up to others."

He reminded that whatever clerics do or say is done or said in the name of Islam. He warned that taking one wrong step by a cleric will go a long way to discredit Islam. The ayatollah said this as part of peaching to his pupils at his ethics class at the seminary.

Elsewhere, in a letter to Judiciary Chief Gholamhossein Mohseni Ejei, the centrist Ntional Development Party, asked him why he is silent in the face of organized violations of the law. According to the letter: "The re-emergence of the ‘morality police’ in the streets simultaneously with the missile attack on Israel means taking advantage of an international issue to further a domestic factional matter."

The party told Ejei: "You have deeply hurt the sentiments of our nation by equating adherence to compulsory hijab with chastity, and by urging the police to treat Iranian women who defy compulsory hijab as if they were dealing with enemy agents."

The letter further stated that "It is a shame that while the country is facing its worst economic crisis in 45 years and it is at war with Israel, authorities have assigned the police force to confront the women. What makes you think that it is part of your responsibilities to harass people's wives and daughters in the streets?"

Khabar Online published a statement by Ahmad Abdollahi, a cleric at the "Promotion of Virtues and Prohibition of Vice Headquarters as saying that: "Some 2,000 women who have been arrested for hijab, have said in interviews with officials that the introduction of the morality police has had no positive impact on the way Iranian women dress."

Along the same lines, Ayatollah Mostafa Dousti Zanjani pointed out that "The people are against the government's order to enforce compulsory hijab," adding that this has been counterproductive. The Friday Prayers Imam of Gorgan Kazem Nourmofidi also said that "In the same way that the government failed to force Iranian women to remove their headscarves in the 1930s, it is impossible to force Iranian women today to wear headscarves."