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Slovenia’s Biggest State-Owned Bank Allegedly Involved in Iranian Money Laundering

Opposition parties claim Slovenian authorities concealed the laundering of over 1 billion euros from an Iranian state bank with connections to nuclear weapons proliferation.

2 October 2017

Slovenia’s money laundering office has opened an investigation into whether the country’s biggest state-owned bank, Nova Ljubljanska Banka (NLB), laundered close to 1 billion euros (around $1.18 billion) from Iran between 2008 and 2010, according to Euractiv.

 

Slovenia is investigating a money laundering scandal worth nearly €1 billion. Image via pexels.com

 

Last week, opposition parties led by the Slovenian Democratic Party (SDS), the party of former Prime Minister Janez Jansa, led calls for an official investigation citing a series of reports made earlier this year by Slovenian media that detailed many suspicious transactions during that period.

 

According to Euractiv, SDS said in a statement last week that the Slovenian political leadership and investigative authorities “did everything they could to hide [the scandal] from the Slovenian public and international institutions and enable further transactions for the Iranian regime.”  

 

Prime Minister Miro Cerar said the allegations of “money laundering involving NLB bank have not been confirmed or rejected yet,” writes Euroactiv.

 

The scandal centers on an Iranian and British citizen, Iraj Farrokhzadeh, who allegedly transferred money for Iran’s Export Development Bank (EDBI) to NLB, after his accounts at Swiss Bank UBS were shut down due to suspicious activity.

 

At the time of the transactions the EDBI was blacklisted on the international market because of its connections with weapons of mass destruction and nuclear weapons proliferation.  

 

In addition to establishing the readiness of institutions to respond to money-laundering operations, and to discover whether individual holders of public office were involved, one angle of the investigation will be the length of time it took for authorities to react after the suspicious activity was noticed, according to the Slovenian parliament’s official report on the inquiry.

 

The Bank of Slovenia banned the transactions in December 2010. According to Euractiv, NLB took nine days to stop the transactions after the order was issued, which enabled Farroukhzadeh to move his operations to Russian banks.

 

 

  • In June of this year, MONEYVAL, the Council of Europe’s expert committee on money laundering and the financing of terrorism, published a report that found that while the number of money laundering investigations has risen in Slovenia, the country remains at risk. 

 

  • According to the same report, Slovenia’s money laundering risk factor is increased due to its geographical location, between the Balkans and the European Union, and its “relatively stable and reliable financial sector,” making it more attractive to criminal networks.

 

 

  • In 2013, Slovenian courts sentenced former Interior Minister Igor Bavcar, and one other ex-top government official for money laundering and unlawful stock trading, according to OCCRP, citing AFP.

Compiled by Kate Syme-Lamont

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