Iran’s New Central Bank Chief

President Hassan Rouhani this week appointed Dr. Valiollah Seif as governor of Iran’s Central Bank. The announcement is widely described as another step in the economic reconstruction of the country after the deleterious economic policies of former President Mahmoud Ahmadinejad.  

Donya-ye Eqtesad focused on Seif’s vision for the Central Bank’s independence, including his plans to control liquidity and inflation, and his goal of increasing the interest rate in the banking sector while providing credit to the production sector and increasing the Central Bank supervision of financial institutions in Iran. Hadaf va Eqtesad focused on Seif’s statements concerning revaluation of the Rial, which has been in a tailspin.

On the surface, Seif looks like a competent technocrat, complete with a PhD in accounting from Allameh Tabatabaei University.  But looks can be deceiving.

Seif’s resume is troubling. He served as managing director or sat on the Board of several financial institutions that were placed on the United States Treasury Department’s Specially Designated Nationals (SDN) list. These companies include Karafarin Bank, Bank-e Sepah, Bank-e Mellat, Bank-e Saderat, Bank-e Melli and its subsidiary, the Bahrain-based Future Bank.

In the cases of Karafarin and Future Bank, the U.S. designated those two entities (in 2012 and 2008 respectively) while Seif was managing director and sat on their boards. Seif’s tenure at Future Bank is of particular note; he served in Bahrain for a period of five years to work for the company, which is owned by Bank Melli. According to former U.S. Treasury Undersecretary Stuart Levey, “Bank Melli goes to extraordinary lengths to assist Iran's pursuit of a nuclear capability and ballistic missiles, while also helping other designated entities to dodge sanctions.”

Given Seif’s background, his appointment as governor of Iran’s Central Bank should be viewed with a dose of healthy skepticism. He has a track record of working with sanctions-busting and proliferation-boosting banks. With his expertise, President Rouhani could help the Islamic Republic continue to evade the international sanctions regime.

Ali Alfoneh is a senior fellow at Foundation for Defense of Democracies.