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Friday, November 25, 2011

Iran: Let's Hope Obama Is Not Deluding Himself

As Iran continues to pursue its nuclear armaments development program, the Obama administration is trumpeting to the world a purportedly tough new set of sanctions aimed at Tehran. David Cohen, the U.S. Treasury Department’s undersecretary for terrorism and financial intelligence, will travel next week to the United Arab Emirates and Israel to discuss the Obama administration's decision to declare Iran a jurisdiction of "primary money laundering concern." According to Cohen (see:

"Our action, along with those taken by the UK and Canada, should have a chilling effect on the willingness of foreign financial institutions to do business with Iranian banking institutions. Foreign banks in jurisdictions where there may not be comprehensive sanctions on Iran are now much more likely to make the judgment that Iran is an increasingly risky place to do business."

As someone who has worked with financial institutions in the field of money laundering prevention, this flaccid move by the Obama administration will have no effect whatsoever on the willingness of banks to maintain their relationships with Tehran. Notwithstanding Cohen's impassioned declaration, this action is being interpreted by Iran as another sign of American impotence.

On the other hand, there is rampant paranoia in Iran following the explosion at a base outside of Tehran, where an intercontinental ballistic missile was being developed. The explosion killed 21 people, including General Hasan Tehrani Moghaddam, who was responsible for Iran's missile program (see: As reported by Thomas Erdbrink in a Washington Post article entitled "Mysterious explosions pose dilemma for Iranian leaders" (,

"Iranian officials said the Nov. 12 blast at the missile base was an 'accident,' and they ruled out any sabotage organized by the United States and its regional allies. The explosion on the Shahid Modarres base near the city of Malard was so powerful that it shook the capital, Tehran, about 30 miles to the east.

Despite the official denial of foreign involvement in the latest blast, suspicions have been raised in Iran by what industry experts say is a fivefold increase in explosions at refineries and gas pipelines since 2010."

Now of course I could be wrong, but my guess is that we will be witnessing more such accidents in Iran in the months to come.

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