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Iran: Anti-Money Laundering Guidelines Issued for Credit Institutions

(June 2, 2011) It was reported on May 17, 2011, that the Central Bank of Iran (Bank-e Markazi) has adopted ten guidelines that will be used to restructure banking with a view to combating money laundering and preventing the financing of terrorism. The Central Bank indicated that the new rules are also aimed at “making the necessary arrangements for the implementation of the country's monetary and banking laws and the law to combat money laundering, and managing a variety of banking risk[s], especially operational, reputation, and adaptation risks.” (Iran: Central Bank Issues New Anti-Money-Laundering Guidelines, DONYA-YE EGTESAD ONLINE [in Persian] (May 17, 2011), World News Connection online subscription database Doc. No. 201105241477.1_2daa00c506db8d35.)

The guidelines address the following matters:

1) identification of credit institutions' Iranian customers. The means to be used are implementation of a policy on acceptance of customers, the use of customer identification procedures, continuous monitoring of customer accounts, keeping of customer records and transactions, and risk management.

2) reporting of cash deposits of funds over the assigned ceiling, with an explanation of the action plan and a sample reporting form for real, legal, and foreign individuals and their transaction profiles.

3) specification of the manner for determining the expected level of customer activity, with consideration given to determining the expected level of activity for both real and legal persons.

4) assignment of tasks in order to keep an eye out for suspect persons, including supervision of the operations and interactions of suspected persons, preservation of the confidentiality of information, and reporting, among other tasks.

5) adherence to anti-money-laundering regulations in brokerage relationships and in the identification of shell banks, as well as on the need of Iranian credit institutions to adopt precautionary measures to establish and maintain brokerage relationships with foreign banks and credit institutions, in order to combat money laundering and financing of terrorism.

6) means of observance of anti-money-laundering regulations in the area of electronic banking.

7) presentation of collected measures necessary to oversee anti-money-laundering regulations in units of foreign credit institutions.

8) specification of how to send records and documents from credit institutions to customers' mailing addresses and stress on the need to keep customer information up to date.

9) means of identifying suspicious deals and reporting practices, with explanations on how to maintain and report on precedents for such activities and examples of types of suspicious actions.

10) observation of bylaws on the terms and manner of keeping records of the banks' commercial securities and documents. Such recordkeeping “is considered an important principle of international standards to combat money laundering and financing of terrorism.” This guideline addresses such issues as how to keep records of information about documents and how long such records should be kept, the purging of documents, and handling of electronic documents. (Id.)