Taxonomies of money laundering: an Iranian perspective
| Date | 25 September 2020 |
| DOI | https://doi.org/10.1108/JMLC-07-2020-0074 |
| Published date | 25 September 2020 |
| Pages | 346-358 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Vahid Molla Imeny,Simon D. Norton,Mahdi Salehi,Mahdi Moradi |
Taxonomies of money laundering:
an Iranian perspective
Vahid Molla Imeny
Department of Economics and Administrative Sciences, Ferdowsi University of Mashhad,
Mashhad, Iran
Simon D. Norton
Department of Accounting and Finance, Cardiff Business School,
Cardiff University, Cardiff, UK, and
Mahdi Salehi and Mahdi Moradi
Department of Economics and Administrative Sciences,
Ferdowsi University of Mashhad, Mashhad, Iran
Abstract
Purpose –This study aims to identifythe sources of laundered money in Iran and the destinations to which
it is transferred, independentlyverified by auditors. Based on such data, the study aims to develop a simple
model of endogenousand exogenous factors facilitating money launderingin developing countries, which can
inform domesticand international legislative and regulatory responses.
Design/methodology/approach –Questionnaireswere sent to Iranian certified public accountantswho
worked for auditing firms in 2019 and who have encounteredsuspected money laundering during their work
with clients.
Findings –The government and public officials are the primary sources of moneylaundering activity in
Iran. The main destinationsof laundered funds are investments abroad, gold, foreigncurrencies, real estate
and purchases of luxury goods. Domestic legislation, while bearing similarities with that found in other
jurisdictions such as the UK and the USA, is flawed in several ways, including an inability to determine
beneficialownership of funds and weak enforcement.
Originality/value –Because of international sanctionsand the prevailing political situation, it is difficult
to obtain data for money laundering and otherfinancial crimes in Iran. The data obtained is of importanceto
international bodies in understanding the nature of money laundering in Iran, and how to negotiate in the
future toaddress mutual concerns. Given the country’sperceived high association with money laundering, the
data obtainedis of value in identifying the specific characteristicsof the problem.
Keywords Iran, Money laundering, Financial Action Task Force, Terrorist financing, Golden Triangle,
Palermo Convention
Paper type Research paper
1. Introduction
In advanced economies, money laundering is invariably associated with sophisticated
techniques intended to avoid the attention of investigators (Mitchell et al., 1998;Simser, 2008;
Irwin et al., 2012). “Smurfing”, or the use of individuals to transfer high volumes of small cash
payments into the financial system, goes against this perceived sophistication but is more
associated with small-scale illicit drug transactions. In contrast, in developing countrie s, the
crime is associated with people smuggling, drug production and manufacture, bribery and
corruption, perhaps by politicians who take “back handers”on the awarding of government
contracts. For example, in Colombia, the illegal narcotics industry is the main source of illicit
JMLC
24,2
346
Journalof Money Laundering
Control
Vol.24 No. 2, 2021
pp. 346-358
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2020-0074
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