April 14, 2014 | Policy Brief

Dubai: A Hub for Illicit Transactions for Iran and Turkey?

April 14, 2014 | Policy Brief

Dubai: A Hub for Illicit Transactions for Iran and Turkey?

Turkey was rocked by a report last month, leaked by the Istanbul Prosecutor’s office, detailing the alleged illicit financial activities of Iranian businessman Rezza Zarrab and his network, which allegedly processed some €87 billion in transactions that violated international sanctions. This was in addition to some $12 billion in gas-for-gold transactions between Iran and Turkey during 2012 and 2013.

But Turkey and Iran were not the only actors fingered in the report.  The report specifically identifies the Persian Gulf emirate of Dubai as a transit point for transactions involving euros, riyal, lira or gold. The report further indicates that Dubai-based entities may have been forging documents to account for non-existent exports.

That these entities were listed in the report does not necessarily mean they are guilty of any crime. However, the report makes very specific allegations that should prompt further investigation.

The prosecutor’s report cites alleged phone transcripts between Zarrab and his associates and a Dubai-based company called Al Nafees Exchange, suggesting that the company forged invoices for a Turkey-based firm called Atlantis Global Lines.  Atlantis, according to the company’s website, is headquartered in Dubai, with offices in Turkey and Iran. According to Al-Monitor, Zarrab was actually an employee of Al Nafees in the past.

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

Two Istanbul-based companies — Rona Döviz ve Kıymetli Madenler Ticaret Anonim Şirketi and Taşbası Döviz ve Kıymetli Madenler Anonim Şirketi — are alleged to have sold gold to Iran via Dubai. The report does not provide any further information about them. According to Turkish financial data, Taşbası had extremely high gold transaction volume in 2013.

Finally, the report notes that a person of interest is Hossein Zarrab, the father of Reza Zarrab, based in Dubai.

The alleged role of Dubai in these transactions is not surprising. Economic data demonstrate that a huge amount of the gold that Turkey sent to Iran during the height of the sanctions-busting scheme originated in the UAE. It has also been widely reported that, once the scheme was underway, “couriers carrying millions of dollars worth of gold bullion in their luggage have been flying from Istanbul to Dubai, where the gold is shipped on to Iran.”

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

Jonathan Schanzer is vice president for research at the Foundation for Defense of Democracies


Iran Iran Sanctions Turkey