Iran’s Sanctions-busting Money Transfer Websites Target AMEX, Visa, Mastercard

Last week, the U.S. sanctioned Iran’s remaining 18 banks from the SWIFT financial messaging network in a move designed to cover the entirety of the financial sector. While the focus on banks is welcome, a broad designation will also degrade more under-the-radar and innovative sanction-busting schemes, which are continuing to finance Ayatollah Khamenei’s terror apparatus.

Iran is relentless in its pursuit of foreign capital, whether by blackmailing European leaders into ill-conceived trade mechanisms to skirt sanctions or by devising ways to undermine them in small but effective ways. Yesterday, the CEO and founder of an Iranian financial services firm known as PAYMENT24 was sentenced to almost two years in prison after he pled guilty to defrauding the U.S. and violating sanctions.  Seyed Sajjad Shahidian facilitated unlawful commerce using PayPal, fraudulent passports, and Visa gift cards in a scheme that went on for nearly a decade and funneled millions of dollars into Iran.

United Against Nuclear Iran (UANI) has been tracking the use of an online payment and exchange platform, Iranicard, that has potentially exposed U.S. financial institutions to sanctions violations. Iranicard is only the most well-known of these schemes: Iranian sanctions-avoiding websites are rife. Leading credit card issuers such as Visa, MasterCard and American Express, as well as fintech firms like PayPal and Skrill, have been targeted.

Iranicard’s clients include multiple sanction-designated entities and other entities of concern, including many companies with links to the Islamic Revolutionary Guard Corps (IRGC) – a Foreign Terrorist Organization – which controls at least one-third of Iran’s economy, including businesses worth a combined $28 billion and 15 to 25 percent of the Iranian stock market.

Iranicard is unambiguous that it seeks to “…look for new loopholes every day in order to break the international sanctions.” The shadowy operation is yet another troubling escalation of a relentless campaign to uphold Ayatollah Khameini’s “resistance economy” principle, which calls for circumventing sanctions by any means necessary.  

If left unchecked, we should expect Iranicard and its clones to prise open throughways to SWIFT transactions, international remittances, and the fraudulent provision of international credit cards, while providing safe passageways for IRGC-affiliated companies to access restricted international markets. Such an outcome would be disastrous to the global effort to curb terror financing and protect international banking. It would demonstrate to bad actors everywhere the ease by which trusted institutions can be undermined, if only with a little creativity.

The private sector and governments are often guilty of neglecting schemes like Iranicard, but this is a major mistake. We cannot focus solely on responding to stunts like the one Iran engineered with Venezuela. The world could only watch as officials piled nearly 9 tons of gold — an amount equal to about $500 million — on Tehran-bound jets earlier this year as payment to its long-time ally for the first-ever deliveries of Iranian oil to Caracas. Though less than the $400 million in cash the U.S. sent the regime by cargo plane in 2016, and less than the value of the PAYMENT24 and Iranicard schemes, every banknote and gold bar arriving on the tarmacs of Tehran can be expected to finance terror and the continued development of an illegal nuclear weapons program. None of it is acceptable.

The U.S. must work toward shutting down subversive schemes and punishing adversaries that feel they have a free hand to undermine sanctions and degrade U.S. national security.  Cutting off Iran’s financial sector in its entirety is now essential to protect the integrity of global banking, bank customers and investors against the regime.

Daniel Roth is Director of Research at United Against Nuclear Iran (UANI). Claire Jungman is UANI’s chief of staff at United Against Nuclear Iran (UANI).