The government of Andorra has frozen “billions of dollars” in bank accounts linked to Iran, Venezuela, and a variety of terrorist groups, according to the daily Diairi d’Andorra, which publishes in Catalan.
The Andorran move, announced on Thursday, was carried out in conjunction with a top secret U.S. Treasury investigation in Miami involving money laundered through Venezuelan banks that was transferred to corresponding banks in the United States.
From Miami, the funds were then wired to accounts in Andorra that were controlled by Venezuelan strongman Hugo Chavez, members of his family and his regime. But the funds were also used by terrorist groups including Hezbollah, Hamas, Al Qaida, and the Colombian Revolutionary Armed Forces (FARC), according to Diairi d’Andorra, which quoted unnamed Andorran government officials.
Treasury’s move into the tiny principality nestled in the eastern Pyrenees between Spain and France is just the latest move in an international effort to crack down on Iranian money-laundering, with the goal of shutting Iran out of international financial markets.
Treasury has focused increasingly on Iran’s deepening ties to Venezuela, where strongman Hugo Chavez has openly embraced Iranian President Mahmoud Ahmadinejad.
Those ties came to international prominence earlier this week, when Chavez pledged during his eight official visits to Tehran to deliver 20,000 barrels a day of gasoline to Iran, a move aimed at helping Iran to deflect efforts by the U.S. Congress to stop gasoline sales to Iran.
On October 22, the U.S. Department of Treasury’s Office of Foreign Assets Controls imposed sanctions on the Export Development Bank of Iran (EDBI) and its newly-created Venezuelan subsidiary, Banco Internacional de Desarrollo C.A. (BID).
Treasury cited the two banks for “providing or attempting to provide financial services to Iran’s Ministry of Defense and Armed Forces Logistics.” OFAC also alleged that EDBI “has facilitated the ongoing procurement activities of various front companies” associated with clandestine Iranian weapons purchases.
“The ostensible reason the Iranian-owned bank Banco Internacional de Desarrollo (BID) was opened in Caracas was to expand economic ties with Venezuela,” Manhattan District Attorney Robert Morgenthau told an audience at the left-leaning Brookings Institution on Sept. 8.
“Our sources and experiences lead me to suspect an ulterior motive. A foothold into the Venezuelan banking system is a perfect “˜sanctions-busting’ method – the main motivator for Iran in its banking relationship with Venezuela,” he added.
The 90-year old Morgenthau, who will retire in December, is a legendary figure in New York who has prosecuted everything from securities fraud to the Bank of Credit and Commerce International (BCCI).
Morgenthau has unveiled a series of Iran-related prosecutions in recent months, including a massive case against Lloyds TSB bank, which agreed to pay the United States more than $300 million in fines for illegally processing wire transfers on behalf of Iranian banks and their customers.
In a separate case, he indicted a company called Limmt and its manager, Li Fang Wei, who used aliases and shell companies to purchased banned missile, nuclear, and dual use materials for Iranian military entities.
Morgenthau predicted this week that Iran and Venezuela, “two of the world’s most dangerous regimes”¦ will be acting together in our backyard on the development of nuclear and missile technology.”
He said it reminded him of the Cuban missile crisis in 1962, “when a leftist populist leader with a strong anti-American streak joined forces with the Soviet Union to bring nuclear weapons in close proximity to our borders.”
“Although the same threat level does not yet exist in Venezuela, the United States needs to be focused on Iran’s expansionism wherever it occurs,” he added.
Morgenthau said he suspected the BID o f using correspondent banking relationships with Venezuelan banks and banks in Panama in a scheme known as “nesting.” Nesting is a means for a banned foreign financial institution to gain access to the U.S. financial system by operating through a U.S. correspondent account belonging to another foreign financial institution, Morgenthau explained.
For example, while BID is prohibited from establishing a relationship with a U.S. bank, it could open an account with a Venezuelan or Panamanian bank that has such a relationship and “effectively gain anonymous access to the U.S. financial system” through them.
Morgenthau said that he expected Treasury to act against other Venezuelan banks within the next thirty days, but declined to name any suspect entities.
But Newsmax has learned from independent researchers who specialize in investigating financial crime in Latin America, that the Iranian regime is using several other banks in Venezuela to clear financial transactions.
These include Banco Occidental de Desevento (BANESCO), which has banking ties to Bank Saderat in Iran (also sanctioned by OFAC), the Banco Caroni, and the Banco Guyana.
BANESCO owns a correspondent bank in the United States.
But the money ties between Iran and Venezuela are just the beginning of a deep relationship that has some U.S. lawmakers worried.
Rep. Ileana Ros-Lehtinen, R, FL, the ranking Republican on the House Foreign Affairs Committee, told Newsmax that Iran has found “a receptive audience in Chavez who has been positioning Venezuela as a satellite of the Iranian regime.”
The two have been working “hand-in-hand”¦ on everything from joint banking schemes, to oil and gas ventures, to military and security agreements, to technological partnerships,” she said.
“This Iran-Chavez-Castro axis, which is expanding to Ecuador, Nicaragua, and other enemies of freedom in the region, helps the Iranian regime project its deadly agenda in the Hemisphere,” she said. “It brings the threat closer to the U.S. and directly undermines critical U.S. security interests.”
Latin America experts for the Menges’ Americas Report at the Center for Security Policy in Washington, DC tell Newsmax that Iran has built a vast network of commercial, financial, industrial, and military ties with Venezeula in recent years.
These include massive Iranian government investments in Venezuela targeting new uranium mines, manufacturing facilities, and food processing plants. Iran has also opened up direct air and sea links to Venezuela.
The commercial ties appear innocent on the surface. Iran has built factories to assemble tractors and bicycles in Venezuela, and regularly ships large amounts of spare parts to them.
But those shipments can disguise more sinister objectives.
In December 2008, Turkish Customs inspectors seized 22 shipping containers bound for Venezuela on board=2 0an Iranian cargo ship at the port of Mersin.
The contents were labeled as “tractor parts.” But when the Turks opened them up, they components for bombs, lab equipment, and chemical weapons components.
The tractor plant, Veneiran, is operated by the Venezuelan Military Industries. Several of its buildings are closed to the public and heavily guarded by Iranian security personnel, the Menges’ Americas Report experts said.
Iran air flies Boeing 747s weekly to Caracas via Damascus. Although the flights are nearly empty, it is virtually impossible to book a seat, because the flights are reserved for military cargo and to transport military and intelligence officials who are whisked away into a VIP lounge without ever clearing Customs, sources tell Newsmax.
The Venezuelan military has tossed out the U.S. Army Field Manual they used for training and has now turned to Iranian Revolutionary Guards troops to train Venezuelan forces in asymmetrical warfare similar to those used by Hezbollah in Lebanon, the Menges’ America’s Report experts said.
Also of concern to U.S. officials is an April 2008 Memorandum of Understanding (MoU) involving military and nuclear cooperation between the two countries.
Chavez alluded to the nuclear deal while in Tehran last week, saying that with Iran’s help he planned to build a “nuclear village” in Venezuela.
According to the Canadian-based U308 Corporation, 70% of the gigantic Roraima Basin – the second largest uranium reserve in the world – is located in Venezuela. Initial estimates show reserves of 5.8=2 0million pounds of uranium ore just in the company’s leasehold area, according to the company’s website.
Iran is operating a gold mine at the very center of the uranium-mining basin that intelligence analysts believe could be used as a base for clandestine uranium exports to Iran.