Armenia moved to allay on Tuesday newly publicized Western fears that its banking sector could be used by neighboring Iran for financial transactions violating international sanctions imposed on Tehran over its controversial nuclear program.
“The Central Bank of Armenia obligates all banks and financial institutions in the Republic of Armenia to scrutinize their transactions, in order to avoid any possible involvement in transactions considered unacceptable by the international community,” the CBA said in a statement.
The statement came in response to an extensive report by Reuters saying that Iran is keen to expand its banking presence in Armenia to deceive Western governments and intelligence agencies trying to stifle the Iranian nuclear program through serious curbs on the Islamic Republic’s banking ties worldwide.
The news agency cited “a Western intelligence report” as saying that the Iranians are seeking “financial alternatives in countries that do not work according to the dictates of the West.” It said Armenia is one of them.
It also quoted an unnamed senior U.S. State Department official as saying that Secretary of State Hillary Clinton discussed the issue with President Serzh Sarkisian during a June meeting in Yerevan. The official did not elaborate.
The Western “intelligence report” identified ACBA Credit Agricole Bank, one of the largest in Armenia, as one of Iran’s principal targets. The ACBA chief executive, Stepan Gishian, strongly denied any business ties between his bank and Iran, however.
“We don't have any relationship with Iran,” Gishian told Reuters. “We never have, we don't now and furthermore we don't plan on becoming a channel for financing Iran. What you're saying is complete nonsense.”
The Armenian Central Bank likewise insisted that that neither ACBA, which is partly owned by the French banking group Credit Agricole S.A., nor any other Armenian bank has correspondent accounts with Iranian financial institutions. “The banks in the Republic of Armenia are strictly bound to customer due diligence rules, in order to avoid any direct or indirect financing of individuals and companies related to nuclear proliferation programs,” read its statement.
The CBA also sought to dispel U.S. concerns over operations of the Yerevan branch of Iran’s Bank Mellat, which has been under U.S. sanctions since 2007. It said the branch has been mainly financing small and medium-sized firms involved in Armenian-Iranian trade as well as tourists and students. It also noted that Mellat’s assets in Armenia have shrunk by more than half since December 2010, to roughly $40 million.
Arakel Meliksetian, deputy head of the CBA’s financial intelligence unit, told Reuters that Mellat Armenia was disconnected from the SWIFT system of payments earlier this year and is no longer able to send or receive international wire transfers.
According to Reuters, diplomats and intelligence officials believe Turkey and the United Arab Emirates remain Iran's principal banking connections even if they are not as welcoming these days. The two countries are under intense pressure from Washington and the EU to clamp down on what the West regards as illicit Iranian commerce.