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Zarif Says Money Laundering In Iran Amounts To Billions Of Dollars

Iranian Foreign Minister Mohammad Javad Zarif at a parliamentary session. File photo

The Islamic Republic's reputation is in no way smeared with money laundering, Iran's Foreign Minister Mohammad Javad Zarif said on November 3, while admitting that money laundering in the country amounts to billions of dollars.

Summoned by Majles (parliament) for questioning, Zarif told lawmakers that his previous comments on money laundering had also been repeated by several other officials.

In a highly controversial remark on November 11, 2018, Zarif had said that those who ""profit in the billions of dollars" from money laundering in Iran are spending millions from their windfalls to prevent the passage of legislation requiring more financial transparency in Iran.

The foreign minister went on to implicitly accuse unspecified state agencies of mounting the campaign against President Hassan Rouhani's package of laws against money laundering, known collectively in Iran as the Palermo Bills.

"We cannot challenge the scenes set by these wealthy and mighty state organs," he said.

Furthermore, in an interview with the Khabar Online published on November 10, 2018, Zarif had asserted, "After all, money laundering is a reality in our country, and there are many who benefit from it." He went on to accuse powerful entities in preventing the needed legislation.

Later, Zarif clarified that he had not accused any specific state agency of money laundering. Nevertheless, allies of the Islamic Republic's Supreme Leader, Ayatollah Ali Khamenei, have gone on the defensive.

Zarif comments triggered a series of angry responses, to the extent that the Prosecutor-General said Zarif's recent accusations of rampant money laundering in Iran were baseless, and the conservative block in Iran's parliament was threatening to have him impeached over his comments.

To appease his detractors, Zarif reworded his earlier comments, but insisted on Sunday, "What I said was that there are pressure groups who have personal interests. Now, you can watch what 'sultan of coins' said in court about ways to do money laundering."

Zarif was referring to Vahid Mazloumin, known as the "sultan of coins,", who was executed in December 2018 on charges of having hoarded two tons of gold coins to manipulate the local gold market.

"If there is no money laundering in the country, on what charges did you execute the sultan of coins?" Zarif asked Majles public session on Sunday.

President Hassan Rouhani presented the proposal to meet FATF's demands to the parliament in November 2017. Supporters of the legislation say joining the FATF and other international agreements on financial transparency, and combating money laundering, and terrorism-financing would reduce international pressure on Iran's already deteriorating economy.

Nevertheless, the fate of two primary components of the bills is still in limbo. The powerful Expediency Discernment Council, assigned to review the proposals, has so far failed to endorse or reject them.

The outcome of Majles' Sunday session with Zarif is yet to be announced, but it was clear that many members of parliament were profoundly unhappy about Zarif's decision to excuse himself and leave the session before it was time.