Iranian banks give Revolutionary Guard the cold shoulder
Iran’s elite Revolutionary Guards, champions of a deadly war with Iraq in the 1980s and more recently active in battlefields in Iraq and Syria, have long been big players in the Islamic Republic’s economy. Since coming to power three years ago, Hassan Rouhani, the moderate president, has tried to contain their influence.
This month, some of those efforts bore fruit when two Iranian banks refused to do business with Khatam-al Anbia, a construction business linked to the guards, which still face international sanctions despite last year’s nuclear deal.
The move has angered hardliners and is likely to intensify the struggle between Rouhani’s supporters and the guards.
“This is banking capitulation” and “self-sanctioning”, said Ahmad Alamolhoda, a senior hardline cleric, of the decision by the two privately owned banks Mellat and Sepah. The banks feared they would be tarnished by association.
The president’s supporters have been emboldened by a plan agreed in June with the Financial Action Task Force (FATF) — the Paris-based body that seeks to combat money laundering and financing of terrorism.
The FATF has relaxed some of its restrictions, spurring local bankers’ hopes they might ultimately resume overseas transactions in hard currencies. “The FATF is now a blessing in disguise for Rouhani to further curb the guards,” said a former banking official. Fearing further interference with their business interests, Iran’s hardliners have called for withdrawal from the FATF. The Supreme National Security Council, Iran’s top security body, is mediating between the two sides.
“Iran cannot afford to withdraw from the FATF and will not do so as any such move would mean destruction of the country if we are not reconnected to the global banking system,” said a senior Iranian banker.
“If the guards care about this country’s progress and even their own interests, they need to respect this agreement.”
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