Larijani Compared Zarif's Remarks on Money Laundering to a 'Dagger in the Heart of the System'

Sadegh Larijani, the head of Iran's judiciary, indirectly likened the statements of Mohammad Javad Zarif, Iran's foreign minister, regarding widespread money laundering in the country to a 'dagger' that has plunged into the 'heart of the system' and urged him to refrain from making statements that have 'no basis.' Zarif had recently reported on extensive money laundering in Iran, attributing the campaign against anti-money laundering bills to 'the interests of tens of thousands of billions for certain individuals.' These remarks provoked severe criticism from several conservative figures, and according to reports, Gholamhossein Mohseni Ejei, the first deputy and spokesman of the judiciary, also described Zarif's statements as 'incorrect' during a meeting with members of the 'Vali-e Faction' in Parliament. In response to Zarif's comments, Larijani stated, 'If there is massive money laundering in the country, why haven't you informed the judiciary about it; this issue is similar to the illegal car importation discussion that was only reported to the judiciary after several months.' He added that 'the anti-money laundering law was passed in the 80s, and according to it, those who are aware of money laundering are obliged to report it to the judicial authority.' The head of the judiciary warned that, given the pressures from the U.S. on Iran and its efforts to, as he put it, 'dissolve' the Islamic Republic, 'it is not expected that some officials make vague and ambiguous statements that could be exploited by enemies.' He called on all officials of the Islamic Republic, especially 'those who are in the government and in the main battlefield,' to be 'careful' with their statements and said that 'officials should not say things that stab the heart of the system like a dagger.' Zarif's remarks about widespread 'money laundering' in Iran also faced reactions from several members of Parliament, with two representatives describing the foreign minister's comments as 'malicious' and 'unsubstantiated.' Meanwhile, the foreign ministry spokesman insisted on the existence of 'widespread' money laundering in the country, labeling the criticisms of Zarif's statements as 'misuse and factional exploitation.' Javad Kazemi Tabar, a 'data mining expert for detecting fraud in U.S. banking transactions,' stated in a speech on July 20 this year regarding 'money laundering in Iran' that the share of 'dirty money' from Iran's liquidity between 1973 and 2001 was 11.8 percent. According to him, even if we do not consider the trend of this money's share in Iran as increasing since 2001 and assume it is still around 12 percent, the estimated volume of dirty money in Iran is 'more than 197 trillion tomans.' This economic expert also identified '25 percent' of Iran's gross national product as 'tax evasion,' which he said constitutes 'a large share of the underground economy' in the country. Zarif responded to requests for documentation of his statements about widespread money laundering in Iran by saying, 'I am not responsible for the documentation.' He added that 'these documents are publicly available, and the relevant center in the Ministry of Economy and Finance has also reported money laundering cases.' According to the Iranian foreign minister, 'the latest documentation related to this issue also concerns individuals with extensive money laundering networks who were recently punished; in addition, other extensive money laundering networks have been documented, so there is no need for further explanation from me.' Ahmad Hatami Yazd, a monetary and banking analyst and a former manager at Bank Saderat, also stated in an interview with IRNA that money laundering in Iran is 'much more' than what Zarif has indicated. Hatami identified unauthorized financial institutions, which he claimed 'are not bound by any law' and 'the central bank lacks the power to close all these institutions,' as examples of money laundering in Iran. He stated that 'part of the money that unauthorized credit institutions took from the people has gone into the pockets of the institution's owner or their family and friends. Now it is unclear where this money is. 30 trillion tomans of people's money has been laundered and gone to unauthorized institutions.' According to this monetary analyst, these institutions, with their 'supporters,' 'managed to stand up to the central bank, and not only did they stand their ground, but they also grew. About a quarter of the country's monetary resources were in the hands of these unauthorized institutions.' Hatami also identified 'non-performing bank debts' as another example of money laundering in Iran and stated that 'embezzlement and rent-seeking are the sources of dirty money.' He noted that the anti-money laundering law passed in Iran has practically never been implemented, and for this reason, the risk of 'political corruption, judicial corruption, and economic inefficiency' as 'effects' of money laundering always exists.