By AML Intelligence Correspondent
FinCEN today tasked financial institutions to report potential Iranian regime abuse of religious charity networks, including diversion of religious tithes, or khums.
Treasury Secretary Scott Bessent said the US “will not allow the Iranian regime to continue its long history of abusing religious institutions to line the pockets of its elites and fund terrorism.”
“By identifying and reporting this potential abuse, financial institutions can provide law enforcement with critical information to isolate the Iranian regime and its financial enablers,” he added
The Iranian regime has been known to abuse ostensibly religious organizations in Iran and neighboring countries to enrich its elites, fund the repression of the Iranian people, and support terrorism abroad, FinCEN said.
In addition, the regime co-opts khums payments from the global Shi’a community to further its destabilizing activities, according to the US.
In some cases, it’s pointed out organizations that collect these payments do so on behalf of prominent Iranian ayatollahs with ties to the regime.
These entities may use informal financial channels like hawalas and cash couriers to remit the funds to Iran or to Iran-linked actors. FinCEN’s Alert includes red flag indicators to aid financial institutions in detecting, preventing, and reporting this illicit activity.
Red Flag indicators of potential charity abuse:
- A charitable organization or nonprofit organization (NPO) solicits donations but does not appear to provide any charitable services, or openly supports the Iranian regime or its terrorist proxies, such as in fundraising appeals or on social media.
- A charitable organization or NPO receives large donations from an unknown source over a short period of time and then sends significant wire transfers or checks to other charitable organizations or NPOs.
- A charitable organization or NPO, or the customer’s employee, engages in behavior suggesting efforts to evade certain reporting or recordkeeping requirements.
- A customer receives transfers from a charitable organization or NPO with which the customer has no clear business relationship, and then the customer proceeds to withdraw the funds in cash or remit them onward.
FinCEN said today (Thursday) it recognizes that legitimate charities should have access to financial services and can transmit funds through transparent channels. FinCEN reminds banks to apply a risk-based approach to customer due diligence requirements when developing the risk profiles of charities and other non-profit customers. This is covered in the Joint Fact Sheet on Bank Secrecy Act Due Diligence Requirements for Charities and Non-Profit Organizations
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