Iran bank rejects US claims of illegal money transfer to Iraq

The Bank Melli Iran (BMI) has dismissed a claim by US Treasury's Office of Foreign Assets Control (OFAC) that it has been funneling "billions of dollars" to its Iraqi branch in order to fund militias. 

In a statement, Bank Melli said the OFAC 's claim about transferring money for Iraqi militias, which was cited by anti-Iran media outlets a few days ago, is "far from reality and unaccounted for."

Earlier this month, the OFAC sanctioned more than 700 individuals, entities, aircraft, and vessels as part of the US administration's re-imposition of anti-Iran sanctions that had been lifted under the 2015 nuclear agreement.

In its press release, the OFAC said it sanctions Bank Melli for "assisting in, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of" the IRGC's Quds Force.

"As of 2018, the equivalent of billions of dollars in funds have flowed through IRGC-QF controlled accounts at Bank Melli," the OFAC claimed.

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The Iranian bank, however, says the whole money transferred to and withdrawn from its branch in Iraq is far less than the amount claimed by the US Treasury.

"All the activities of the branch are according to the regulations of the Iraqi Central Bank," the bank's statement said.

The Bank Melli branches in regional countries and other parts of the world are operating in accordance with the international trade regulations and the rules of the host countries, the statement noted.

"The activities of these branches ... have been monitored by the central banks in these countries during the past seven decades," the statement said.

The Bank Melli Iran's branch in Iraq was established in 2007 in a professional move and as part of the bank's branch expansion policies, it added.

The branch was established in Iraq in a bid to offer conventional banking services according to legal procedures of the Arab country, the Bank Melli said in the statement. It added that so far, according to the audits of the host country, the bank's performance has been assessed as accurate and well-documented.

"Therefore, the OFAC 's false claim about transferring money for Iraqi militias ... ignores the consistent cultural, historical, social and economic relations between the two countries, and the fact that the huge number of pilgrims commuting between the two states need to use banking services," the statement said.

In its press release, the OFAC claimed the IRGC's Quds Force "has used Bank Melli to dispense funds to Iraqi Shia militant groups, and Bank Melli’s presence in Iraq was part of this scheme."

"Bank Melli has enabled the IRGC and its affiliates to move funds inside and outside of Iran," it added.

Bank Melli Iran is the first national and commercial retail bank of Iran. It is considered as the largest Iranian company in terms of annual income. It is the largest bank in the Islamic world and in the Middle East.

By the end of 2016, BMI had a net asset of $76.6 billion and a vast network of 3,328 banking branches; so it is known as the largest Iranian bank based on the amount of assets.

The Bank Melli has 3,328 active branches inside Iran and 14 active branches and four sub-stations abroad. The first foreign branch of BMI was opened in Hamburg, Germany in 1948.

A recent report by Germany’s business newspaper Handelsblatt claimed that Germany's part state-owned telecom provider Deutsche Telekom had cut off Bank Melli's Hamburg office.

However, Bank Melli announced in a statement that all of its overseas branches remained connected to phone and internet services.

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