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One Last Blow To Iran's Former Top Banker

Valiollah Seif, Iranian economist and the former Governor of Central Bank of Iran. Undated.
Valiollah Seif, Iranian economist and the former Governor of Central Bank of Iran. Undated.

Following the rejection of his appeal for a conviction on financial rules violations, former Central Bank of Iran (CBI) governor Valiollah Seif is now banned from holding public office for life.

The ban means he will have to step down from his current post as one of President Hassan Rouhani’s advisors, the Islamic Republic’s judiciary announced in a statement on its website December 6.
On November 19 Iran’s Supreme Audit Court of Iran (SACI) upheld a February 2017 conviction of the former governor and his deputies.

After serving nearly five years as the CBI governor, Seif found himself in hot water in early 2017 when one of the five official Central Bank-approved credit institutions was unable to pay back the deposits of the customers. Meanwhile, the unprecedented nosediving of the national currency (rial) against dollar and chaos in Iran's currency market put added pressure on the 66-year-old governor.

Meanwhile, in May, the U.S. Treasury Department had sanctioned both Seif and his staff for their roles in laundering money through an Iraqi bank to Tehran’s Lebanese proxy Hezbollah and the Quds Force, the Islamic Revolutionary Guards Corps' (IRGC) extraterritorial force. Washington has previously designated both Hezbollah and the Quds Force as terrorist organizations.

Former Iran Central Bank Governor Valiollah Seif (R) and his then deputy Ahmad Araghchi (C), undated.
Former Iran Central Bank Governor Valiollah Seif (R) and his then deputy Ahmad Araghchi (C), undated.

Ultimately, Rouhani replaced Self in July with politician Abdolnaser Hemmati, who is considered a moderate.

There is a long history of criminal behavior at Iran’s central bank, the U.S. daily The Hill reported October 18, adding, "The Obama administration sanctioned the CBI itself in 2012 for facilitating transactions with smaller banks to circumvent previous global sanctions. An executive order by President Obama justified the move, citing ‘the deceptive practices of the Central Bank of Iran and other Iranian banks to conceal transactions of sanctioned parties, the deficiencies in Iran's anti-money laundering regime and the weaknesses in its implementation, and the continuing and unacceptable risk posed to the international financial system.’”

Seif represents a rare case of an Iranian official who has been sanctioned both by the U.S. and censured at home.

However, almost immediately after his dismissal as the CBI governor, Seif was appointed as President Rouhani’s advisor for financial and banking affairs.
Two months later, on September 24, the judiciary's spokesman, mid-ranking cleric, Gholamhossein Mohseni Ejei, told reporters that Seif was under investigation and banned from leaving the country.

Ejei had earlier confirmed that Seif was also suspected of being involved in violating the law after the detention and interrogation of his deputy in forex affairs, Ahmad Araqchi, the brother of deputy foreing minister Abbas Araqchi.

The dramatic downfall of the rial's value that led to the widespread anti-establishment demonstrations in large cities of Iran last July, was attributed by conservatives to Seif's mismanagement.

Parviz Sorouri, secretary-general of the conservative Society of Path Seekers of the Islamic Revolution, demanded Seif also be prosecuted for the national currency devaluation.

“The senior officials of the CBI, especially Valiollah Seif, are the main suspects of this case and they should be held accountable for their weak and provocative measures,” Sorouri was cited as saying by state-run website MNA in July.

Economists both in Iran and abroad believe that the currency’s weakness is due to structural problems of Iran’s economy and also U.S. sanctions.

Even Seif’s dismissal as CBI governor did not satisfy his critics. Mohammad Hassannejad, a member of Iranian parliament's Economic Commission, said in August “dismissing office-holders does not mean that they cannot be held accountable for their wrongdoings.”

Nonetheless, Seif has repeatedly maintained that the CBI did not have any role in financial policy-making and was always subservient to the government's orders.