DUBAI: As a financial hub linking the US, Europe and Asia. the UAE has a critical role to play in efforts to block terrorist financing, US Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker said on Thursday.
At a press briefing at the Ritz-Carlton Hotel, Dubai International Finance Centre, during a short tour of the Gulf that has taken her to Saudi Arabia, Kuwait and the UAE, Mandelker spoke of the “strong cooperation” between the US and the UAE and other Gulf members of the Terrorist Financing Targeting Centre (TFTC) set up as a result of President Trump’s visit to the Middle East in 2017.
The US and the UAE in May uncovered a currency exchange network helping funnel cash through the UAE for Iran’s Quds Force, the covert branch of the Islamic Revolutionary Guards, she said, citing the discovery and shutting down of the network as an example of strong US-UAE cooperation.
“This network of currency exchanges abused the UAE financial sector by transferring cash out of Iran and converting it to US dollars for the benefit of the Quds Force, money that they — as we all know — use to fund regional proxy groups to destabilise the region.
“In order to conceal the Quds Force involvement and these activities from UAE authorities the network forged documents and purposefully disguised its conduct behind seemingly legitimate businesses, hiding its illicit activities behind front and shell companies.”
Through the TFTC, she said, “we have a number of additional efforts that are well underway and we think that it really sends a very strong unified message that the United States and our Gulf partners are very committed to countering terrorist financing in the region.”
She added: “The UAE is a major international finance hub that serves as a critical conduit connecting the financial systems of the United States, Asia and Europe and so we are also very committed to working with the UAE on anti-money-laundering and countering the financing of terrorism programmes there too. We have a number of joint efforts and very strong collaboration with our UAE partners.”
The US’ reimposition of sanctions on Iran are necessary due to the failure of the Joint Comprehensive Plan of Action (JCPOA), created to bring Iran back into the international community, was the primary focus of her statement.
The sanctions — including on Iranian oil and on financial institutions dealing with the Central Bank of Iran — are due to come back into full force on November 4.
Mandelker declined to specify how the US would convince other nations to join it in sanctions — it’s involved in a trade war with China, the biggest importer of Iranian oil, and the European Union announced in May that it preferred to salvage the JCPOA.
But she strongly hinted that the US would enforce sanctions against private companies, whatever their national government’s view.
One of the biggest factors hindering outside investment in Iran following the lifting of sanctions under the JCPOA was that the US still did not allow dollar clearing in transactions involving Iran.
Once the US reimposes sanctions on dealings with the Iranian Central Bank in November, the situation could become difficult for firms with investments in or dealings with Iran.
“We’re very serious about our authorities and we’re very serious about our use of those authorities,” Mandelker said, referring to a press briefing given last week by US State Department Director of Policy Planning Brian Hook. “We are seeing a number of companies — every day, it seems there’s a new major company that’s announcing it’s getting out of Iran. The private sector is responding very quickly to the snapback of our sanctions. We expect that to continue.”
She added: “I think the private sector is getting out for a number of reasons. Number one, they have a very clear understanding of our sanctions authorities and how the US has and will continue to implement and enforce those sanctions as we have in the past.
“Also I think the private sector is likewise wise to the ways in which Iran has been able to surreptitiously use and move money to fund their malign activities, including their support for terrorism, for the Houthis, and for Assad, and they don’t want to be caught up in that web.
“This administration has been quite clear. We are very serious about our authorities, about the use of our authorities and the enforcement of those authorities.”