Moderator: Greetings to everyone from the U.S. Department of State. I would like to welcome our participants dialing in from around Asia, and thank all of you for joining this discussion.
Today we are pleased to be joined from Mumbai by Sigal Mandelker, Under Secretary for Terrorism and Financial Intelligence of the U.S. Treasury Department. Under Secretary Mandelker will discuss counterterrorist financing, money laundering, and other illicit financial threats.
We thank you, Under Secretary Mandelker, for taking the time to speak with us today.
We will begin today’s call with opening remarks from the Under Secretary, and then we will turn to your questions. We will try to get to as many as we can during the time that we have. As a reminder, today’s call is on the record.
With that I will turn it over to Under Secretary Mandelker.
Under Secretary Mandelker: Thank you very much and good morning to everyone.
Today is the final day of my trip to Southeast and South Asia which is part of the U.S. government’s ongoing engagement with strategic partners in the region. At every stop, we have discussed our efforts to counter illicit financial threats that could compromise the integrity of the global system. During visits first in Malaysia, then Singapore, and now in India, we have engaged with foreign counterparts, including through the Ministries of Foreign Affairs, Finance, Central Banks, and with financial regulators. We’ve also had important discussions with financial institutions and other private sector and industry stakeholders about trends we are seeing, and risks related to terrorist financing, money laundering, and other threats.
Today, we are in our second day of meetings here in India with private sector meetings in Mumbai that include banks, shipping companies, and other industry stakeholders. Yesterday, we held government meetings in New Delhi including with the Ministries of Petroleum, External Affairs, Home Affairs, and Revenue.
These meetings followed two days of meetings in Singapore and one day in Malaysia where again, we had important and useful discussions on illicit finance threats, including on issues related to financial and shipping hubs, and sanctions evasion tactics.
Throughout the trip, we have focused on a number of key themes in nearly every meeting. First, Iran. We have discussed the reimposition of U.S. nuclear-related sanctions on Iran and the need to strengthen our global coalition to combat Iran’s state support for terrorism and ongoing malign and destabilizing behavior. This administration continues to place significant focus on our pressure campaign against Iran, and in less than two years, we’ve issued 26 rounds of sanctions targeting over 980 Iran-related individuals and entities. In just the last two weeks, we have sanctioned, as an example, the nuclear scientists and other key personnel and entities involved with the Iranian regime’s past nuclear weapons efforts. These are individuals and entities who are still operating in Iran’s defense sector.
Last Tuesday, our first full day in the region, we took a significant action to disrupt a vast network of 25 entities and individuals in Iran, the UAE, and Turkey involved in an elaborate sanctions evasion scheme. That resulted in over a billion dollars’ worth of U.S. dollars, euros, and gold going back to the Iranian regime, including to the IRGC and the Iranian Ministry of Defense.
We use these, and other recent actions and meetings, to express the inherent risks of doing business in an economy that is as deliberately as opaque as Iran’s, and of course, in a country that is the single, largest state sponsor of terror.
We are also taking the opportunity on this trip to stress the importance of robustly enforcing U.S. and UN sanctions, including highlighting specific sanctions evasion tactics that we’re seeing in the region and elsewhere. Just last Monday, [Treasury’s] OFAC updated its advisory to the maritime petroleum shipping community to highlight risks associated with facilitating the shipment of petroleum destined for Syrian government owned and operated ports including, very importantly, petroleum of Iranian origin.
Among other things, the advisory list, the deceptive shipping practices used by Iran and others to obfuscate the origin or destination of Iranian oil, including things like falsifying cargo and vessel documents and disabling the automatic identification systems of these vessels to mask the origin, destination, or route of oil. These types of actions [highlight that evasion of] sanctions are unsafe practices that should serve as a wakeup call to the entire shipping industry, including to insurance companies.
We also added dozens of new vessels involved in illicit oil shipments, including 16 shipping to Syria and more then 30 engaging in ship-to-ship transfers. The entire shipping community should be alert to, and wary of, these vessels.
This is particularly important in places like Malaysia, Singapore, and India which, as international trading hubs, can be susceptible to abuse using these tactics.
Finally, and very importantly, we discussed our shared efforts on countering the financing of terrorism. We had very productive discussions. For example, yesterday [in our meetings] with India, which recently of course experienced a horrific terror attack, we discussed ways that we can continue to strengthen our cooperation on combatting terrorist financing, and deepening that relationship. This included discussion on terror groups operating in the region, as well as on Iran which, again, remains the world’s largest state sponsor of terror.
With that, we would be happy to turn it over to questions.
Moderator: Thank you very much for those remarks. We will now begin the question and answer portion of today’s call.
Our first question comes to us from Joshua Berlinger from CNN based in Hong Kong.
Media: Hi Under Secretary Mandelker.
I actually [inaudible] criminal network. It’s been about a year since the [inaudible] put sanctions on the network. While [inaudible] on the ground [inaudible] operation there [inaudible]. One of the main reasons [inaudible].
Moderator: Josh, I’m sorry, we’re actually having a lot of problems hearing you. I don’t know if you can get on a better line or we can address your question with another call.
Moderator: All right, we’ll go to a question submitted in advance, and then Joshua, if you can get back on the line we will take your question again.
Our next question was submitted in advance by Bernadette Tamayo with The Manila Times. She asks: Have you monitored terrorist financing to the Philippines through overseas Filipino workers’ remittances?
Under Secretary Mandelker: What I can say about that is we continue to monitor terrorist financing related to [the Philippines], and in fact, I believe we’ve had some actions connected to that. I can’t comment specifically on your question, but of course, this is an area that we continue to watch very closely.
Moderator: All right, thank you. As we wait for questions to come in, I’ll ask a question submitted in advance by the Hanoi Times in Vietnam. The journalist asks: How is the money laundering situation in Southeast Asia, including Vietnam? The number of Vietnamese applying for visas have increased sharply. Does the U.S. government strictly monitor these applicants?
Under Secretary Mandelker: That’s actually a question that would be better stated for the State Department, but as I mentioned before, we do a lot of work globally to monitor illicit finance, money laundering. We do that with a number of partners in a number of different ways, both through international cooperation and through the cadres of finance analysts that we have in the Treasury Department and with interagency partners.
Moderator: Another question submitted in advance by the Air Times News Network in Malaysia. They ask: What happens if regional states fail to cooperate with the U.S. to put pressure on Iran? What kind of assistance will the U.S. provide to help the regional states to stop Iranian moves in the area?
Under Secretary Mandelker: We actually have had a lot of cooperation globally, both with other governments, and with the private sector on our Iran pressure campaign. As you may be aware, when the President first announced that nuclear related sanctions would be re-imposed, we saw well over 100 companies very quickly announce that they were leaving Iran. Companies literally left Iran in droves. And similarly, what we’ve done in all of our meetings, whether it’s here in Southeast or South Asia and around the world, has been very transparent with governments and companies that we are fully enforcing our sanctions. We think it’s very important to send that message, and you’ve seen that in a number of actions that we’ve taken over the last two years, and very specifically since sanctions have been reimposed.
The other piece of this that we think is very important for other governments and companies in the private sector to understand is that Iran works in many duplicitous ways. They have engaged in scheme after scheme of deceptive practices to try to illicitly move money, and gain revenue to further their malign and destabilizing behavior. And repeatedly, we have successfully exposed and taken action in connection with those illicit, deceptive practices.
One of the points that we’ve made repeatedly in our engagements, for example, is that in a number of actions over the last year, we have highlighted that the officials of the Central Bank of Iran have been complicit in the movement of illicit finance.
So, part of our message is we’re being very transparent, we are fully enforcing our sanctions. And the other part of our message is that we want companies and our government counterparts to fully appreciate and understand the kinds of evasion tactics that [are going on.]
Nobody wants to be on the other side of a commercial transaction that resulted in money going to elements of the Iranian regime like the IRGC, the Quds force, MODAFL and others who are undertaking, and have systematically undertaken, activities to support the kind of terrorism and malign activity that we’ve seen for many, many years from the regime.
Moderator: Thank you.
Our next question comes to us from Ravi Shankar Buddhavarapu from Real Republic in Singapore.
Media: In terrorist financing, [we] face some special problems in the Indo-Pakistan region, in my understanding, because of the “hawala” thing. And Dawood Ibrahim, on whom there was a congressional hearing last year, 2018, in March I think. It was told to the Congress that Dawood Ibrahim had greatly diversified, and he was responsible for narcotic trade and for financing a lot of the terrorist activities. Probably the Haqqani Network as well.
And plus, a related question is Dawood Ibrahim has sought to come back to India. He wants to be housed in the Arthur Road Jail in Mumbai. I mean he’s setting conditions for his return to India. He’s dying, he’s apparently sick.
So how, number one, do you deal with terrorist financing investigations in India? And number two, how far are the negotiations between [Ibrahim and] the Indian government, I mean, I’m sure the Indian government has its own take on it. However, what does the U.S. advise? Having Dawood Ibrahim in Arthur Road Jail is very, very, very extremely useful for India as well as the U.S. because he set up the whole network. So what do you advise, and how do you react to this?
Under Secretary Mandelker: I can’t comment — again, thank you got your question. I can’t comment on any specific individuals or [any] actions that we have taken.
What I can tell you is that we’ve had very productive conversations during my trip here in India on our joint efforts to counter terrorist financing including the Af-Pak region. This is an area where we are just continuing to enhance that kind of cooperation. Of course India itself has been susceptible to these, to terror attacks. And we, the United States, including in the Treasury Department, have done a lot of work with our Indian counterparts both in terms of information sharing, and also work that we’re doing in FATF, the Financial Action Task Force, among other areas. It’s quite a productive relationship and we look forward to continuing to enhance it.
Moderator: Thank you. Well go now to a question submitted in advance by Vince Ferrera with Business World in the Philippines. He asks:
Media: Has the U.S. government monitored any flow of funds from terror groups in the Middle East to local groups from Southeast Asia? Or are there any monitored flows of funds from groups in Southeast Asia to the Middle East?
Under Secretary Mandelker: I can’t go into the specifics, but I can tell you generally speaking, of course, that this is something that we monitor very carefully and it has, and will, continue to be the subject of our information sharing and our cooperation with these regional partners, and of course including during discussions that we’ve had during my trip and beyond.
Moderator: Thank you. A question from China Business Journal and they ask:
Media: Do you think the instrument in support of trade exchanges INSTEX that Europe is going to adopt would somehow break U.S. sanctions?
Under Secretary Mandelker: INSTEX is something that we’ve discussed extensively. I actually published an OpEd on the INSTEX about a month ago. What we’ve said as a general manner on INSTEX, and any kind of special purpose vehicle is, any entity, regardless of what it is, that if it engages in sanctionable conduct, it will be subject to our authorities.
We’ve likewise strongly warned the Europeans that they need to be extremely cautious in any kind of trade with Iran, given the fact that the Iranian regime has been so adept at using deceptive practices to move funds and other materials and commodities through the international financial system.
So as you may be aware, when Europe announced the establishment of INSTEX, they also announced that it would be subject to the highest anti-money laundering standards. We find it very difficult to understand how that could possibly be the case, given that Iran has repeatedly failed to adopt the anti-money laundering and counter terrorism financing standard, that they had committed to over three years ago when they agreed to adopt an action plan under the Financial Action Task Force.
Again, they repeatedly refused to implement the standards. I should say the past standards, the rules and regulations that they would need to have an effective system, much less implement them. And of course when it comes to a country that is the single largest state sponsor of terror, the heightened risks involved in dealing with an economy that has no standards, no transparency, to speak of, are quite elevated.
Again, we discussed this, I discussed this at greater length in the OpEd.
But I think our message for the Europeans is that they need to be very wary and very cautious.
Moderator: Thank you very much.
Our next question is from Masakatsu Ota from Kyodo News based in Japan.
Media: Thank you very much for having me here. My question, is that China has been trying to promote, you know, regional connectivity between the DPRK and Iran, and [inaudible] financial transaction which might support terrorist activities. Did the Chinese say anything about the recent development between the two nations on the connectivity or other cooperation between two nations, Iran and the DPRK?
Under Secretary Mandelker: That’s not something that I can comment on at this time.
Media: Okay. Thank you very much.
Moderator: All right. We have another question from Ravi Shankar Buddhavarapu from Real Republic in Singapore.
Media: Thank you, madame. This question has to do with the Masood Azhar, the guy carried out the bombing that killed [inaudible] troops in Kashmir. So, China has has been blocking his designation as a terrorist for decades now. And recently, just a couple of days ago, in the UN they again blocked it.
So I mean [China] is worried about Uighur militancy, Islamic militancy. They continue to support that part of the Taliban that they can trust to ensure security for their infrastructure in BRI, especially the Pakistan part of it.
So this being the case, is there any terrorist financial links from the Chinese government or underground organizations in China to financed terrorist networks in Pakistan and India. Because it lands up in India. Thank you.
Under Secretary Mandelker: In terms of your specific question, that’s not something I can comment on at this time. Of course, we remain very united with India and holding those responsible for terrorist attacks accountable, specifically with respect to proceedings at the UN, I would refer you directly to the State Department.
Moderator: Thank you. Unfortunately that was the last question we have time for. Under Secretary, do you have any closing words you would like to offer?
Under Secretary Mandelker: Thank you for setting up the call and for all those that dialed in. Again, this has been a very successful trip both in connection with our meetings with our government counterparts and the private sector. It’s going to be an area of continued focus for us at the Treasury Department.
Moderator: I want to thank you, Under Secretary Mandelker, for joining us and thank all of you for participating and for your questions.