Dubai may be a hub for Turkey and Iran’s illicit transactions

The Foundation for Defense of Democracies (FDD), a Washington-based think tank, has claimed in a policy brief issued on Monday that Dubai may have turned into a hub for illicit transactions linked to Turkey and Iran.

In the policy brief, FDD Vice President of Research Jonathan Schanzer pointed out a report, leaked by the İstanbul Prosecutor’s Office, detailing the alleged illicit financial activities of Iranian businessman Reza Zarrab, who was arrested as part of a corruption and bribery investigation that broke on Dec. 17, 2013. Zarrab was later released pending trial.

Zarrab and his network have allegedly processed 87 billion euros “in transactions that violated international sanctions,” Schanzer said.

Citing that the report specifically identifies Dubai as a transit point for transactions involving euros, riyals, liras and gold, Schanzer said Dubai-based entities may have been forging documents to account for nonexistent exports and that this requires further investigation.

Late on March 13, a Twitter account behind a string of leaks in the corruption scandal posted what it presented as police files detailing graft allegations against four former ministers. The documents allegedly revealed that these ex-ministers had received bribes from some businessmen.

On March 14, a public prosecutor completed an indictment regarding corruption and bribery allegations following the Dec. 17 police operation and sent the document to a deputy chief prosecutor in İstanbul, who, after approving the document, forwarded the indictment to a high criminal court.

Schanzer said the prosecutor’s report cites phone transcripts allegedly between Zarrab and his associates and a Dubai-based company called Al Nafees Exchange, suggesting that the company had forged invoices for a Turkey-based firm called Atlantis Global Lines. Schanzer said the latter has headquarters in Dubai and offices in Turkey and Iran.

Another company flagged in the report was the Dubai-based Al Mahsumi General Trading. The prosecutor’s report suggests that Zarrab’s network had communicated with this company to issue forged invoices for the aforementioned Atlantis Global Lines.

İstanbul-based companies involved

Schanzer points out that two İstanbul-based exchange and precious metals companies, Rona Döviz ve Kıymetli Madenler Ticaret Anonim Şirketi and Taşbaşı Döviz ve Kıymetli Madenler Anonim Şirketi, are alleged to have sold gold to Iran via Dubai. The report notes that one person of interest is Hossein Zarrab, the father of Reza Zarrab, who is based in Dubai.

Stating that the alleged role of Dubai in these transactions is not surprising, Schanzer said couriers carrying millions of dollars worth of gold in their luggage have been flying from İstanbul to Dubai, where the gold is then shipped on to Iran.

“At the very least, these broad accusations might have prompted the [United Arab] Emirates to launch an investigation. With this new report, which now includes specific entities and allegations, the UAE should undertake a serious probe,” said Schanzer.