Cut off Iran’s money

CYNTHIA RAMSAY

Iran sponsors terrorism, has the third-largest known oil reserves in the world and is working towards manufacturing a nuclear bomb. As well, the country’s leadership has declared publicly its desire to wipe out Israel. As dire as the situation is, there are a few things we can do that might have a small impact – become actively involved, making wise choices at the bank and at the gas pump, and asking our governments to do the same.

This was the main message of Avi Jorisch, who addressed approximately 150 people at the inaugural event of the Centre for Israel and Jewish Affairs, Pacific Region, which took place on May 15 at Performance Works on Granville Island.

Jorisch is the founder of a consulting and training firm that specializes in security issues relating to terrorism, illicit finance and radical Islam. He is the author of four books, including Iran’s Dirty Banking: How the Islamic Republic Skirts International Financial Sanctions (2010) and Tainted Money: Are We Losing the War on Money Laundering and Terrorism Finance? (2009). His dialogue-style presentation in Vancouver focused on why we should care about Iran as Canadians and as Jews, as well as ways in which ordinary citizens could have an effect on global politics.

Constantly eliciting ideas and comments from the audience, Jorisch noted that one of the main obstacles to stopping Iran’s efforts to build a nuclear bomb is the world’s dependency on its oil, the country having the third-largest oil reserves in the world, behind Saudi Arabia and Canada.

As well, its location is important. Jorisch explained that it sits on the Strait of Hormuz, “through which about one-fifth of the world’s oil travels every single day”; “Iran funds organizations that ... build and proliferate IEDs, improvised explosive devices, that ... kill coalition troops, both in Iraq and Afghanistan, and they’ve said that it’s one of their missions, in terms of bringing our boys and girls, and yours, home in body bags.”

He added the concern about nuclear proliferation. “They’ve already been funding organizations like Hamas and Hezbollah, which are global terrorist organizations,” he said. “They could certainly proliferate their weapons technology to other groups who might very well use it and, secondly ... if Iran gets the bomb, so will other countries: Kuwait, Saudi Arabia, Turkey and Egypt have all stated that, if Iran gets the bomb, they want the bomb.”

From a specifically Jewish perspective, he added, noting that he is the son of Holocaust survivors: “As Jews, we are standing in the long shadow of the Holocaust. Six million Jews were killed between 1933 and 1945 and this particular regime has claimed that it wants to kill another six million Jews.”

About what the average citizen can do about the situation, Jorisch explained that countries have various levers they can use to influence the policies of other countries: economic, diplomatic, military, propaganda and covert operations (Internet viruses or targeted assassinations, for example). While most of us cannot affect the majority of these levers, he said that everyone can lobby members of Parliament or other elected officials and try to impact the messaging/propaganda and, “when it comes to economic warfare, that’s where I really think you have an ability to really shape the world’s policies today.”

Oil and banking are the “soft underbelly of Iran economically speaking,” said Jorisch, who has worked for both the U.S. Department of Defence and the U.S. Treasury Department. In researching his book Tainted Money, he, in 2009, determined that there were 30 main Iranian banks; 20 inside the country, 10 outside its borders. To find out which of these banks was involved in illicit activities, he visited a few key websites, including that of the United Nations, which indicated that four of the banks were blacklisted; that of the U.S. Treasury Department, which blacklisted those four and another 16; and another Treasury site that talks about money laundering, and which listed all 30 Iranian banks.

After these searches, he investigated further to discover which international banks do business with Iranian banks. “I wanted to figure out where Iran was banking,” said Jorisch.

For five months, he tracked all their correspondent accounts around the world. He found out that about 60 banks were doing business with Iranian banks. Boycotting or talking with the banks won’t help, nor will publicizing the information on the web, as he did, writing your elected officials or speaking with various government departments, as he also did. After dismissing other audience suggestions for action, Jorisch explained what he did: he mapped out the correspondent banking relationships back to the United States.

“So, in this example, Citibank is doing business with Deutsche Bank, who’s doing business with an Iranian bank, so I basically did the chain,” he said. “I gotta tell you, that got their attention good and fast. Why? Because no one wants to lose their access to the U.S. market and if you’re connected to an Iranian bank that’s been designated by the U.S. Treasury Department, definitely you’re in deep danger of losing your access to the U.S. market.”

He said he “named and shamed” financial institutions in his book, which, with the help of AIPAC (the American Israel Public Affairs Committee), he made sure that every member of Congress and their staffs received. He continued, “Then, six weeks later, something amazing happened, something called CISADA, the Comprehensive Iran Sanctions Accountability and Divestment Act, which essentially said [that] every U.S. financial institution ... if they’re doing business within two degrees with an Iranian bank, they’ve got to cut off the middleman. So, in my example here, Citibank not only needs to know that it’s doing business with Deutsche Bank, it has a legal obligation to know within two degrees that it is connected to an Iranian bank. And, I gotta tell you, banks exited the market overnight. It went basically from 60 banks down to a dozen banks ... and it was virtually overnight.”

President Barack Obama signed CISADA into law on July 1, 2010, and Jorisch used his success as an example of how everyone can be empowered. “Everyone of you can take action,” he said, not only in banking – by ensuring that your financial assets are not invested in Iran or other countries that sponsor terror, and by lobbying elected officials to make sure Canada is also not dealing with banks and other companies from countries that sponsor terror – but also in oil and gas.

According to Jorisch, one of the reasons that countries around the world have not done all they could do to cripple Iran financially is: “We all drive cars and we’re afraid basically [that] the price at the pump will be much higher.... What does every politician want? To get reelected. In order to get reelected, we’ve got to make sure that the most important commodity that you yourself use every single day is kept at a reasonable price. So, if you essentially blacklist an international bank, then, essentially, it sends the signal that oil ought to go up.”

This is the case, he explained, because, as economic sanctions have taken effect, Iran has started routing all its oil payments through its Central Bank, “which is why your government and mine hasn’t wanted to designate the Central Bank because, once you designate the Central Bank, it’s an act of war, to begin with, and ... it’ll send a message to the international community that the price of oil is going to go up, right, because it’s the third-largest known oil reserves, you’ve got to keep the oil flowing.”

In the question and answer period that followed, Jorisch admitted that sanctions do hurt Iranian citizens, but argued that sanctions against the banks are the smartest types of sanctions. About their effectiveness, he acknowledged that Iran is still marching towards the nuclear bomb, so, in that respect, sanctions are not working; however, in terms of financial pain and raising the cost of doing business for Iran, sanctions have been effective.

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