The High Criminal Court of Bahrain on Thursday issued a verdict in an allegedly money laundering case, convicting Future Bank and six of its officials, the CBI and other Iranian banks, Bahraini news outlets reported last week.
In the statement seen on the CBI website, the regulator described the ruling as “baseless” and said it “reserves the right to take legal countermeasures”.
Known also as Al-Mustaqbal Bank, the Manama-based bank was set up in 2004 with the permission of the Bahraini government as a joint venture by Bank Saderat Iran and Bank Melli Iran and the tiny Arab state’s Al-Ahli Bank.
The CBI said the ruling was a “political statement”, arguing that Future Bank had come under control of the Central Bank of Bahrain following a diplomatic rift between Iran and Saudi Arabia in 2015.
The regime in Bahrain is a close ally of Saudi Arabia and coordinates its domestic and foreign policy with Riyadh.
“After that, the country evicted Iranian shareholders in Future Bank. The money laundering allegations were made against the bank five years after the Manama government seized the bank and ousted its Iranian managers,” the CBI said.
It accused the Bahraini judiciary of making false allegations against Future Bank, reiterating that due process was not observed in issuing the verdict.
Reiterating that the ruling lacks judicial validity, the CBI warned the kingdom that such moves “will undermine its credibility among foreign investors.”
Heavy Fines
The Foreign Ministry in Tehran strongly dismissed the charges against Iranian banks by Manama. Speaking to reporters on Sunday, Saeed Khatibzadeh, the ministry’s spokesman, said the ruling was “politically motivated”.
As per the verdict published by the sate-owned Bahrain News Agency (BNA), those convicted in the case have been fined 19 million Bahraini dinars. The ruling calls for confiscating the alleged dirty money, amounting to approximately $1.3 billion and sentences six people to prison terms.
Five of the convicted are sentenced to ten years each and the sixth convicted individual was sentenced to five years.
According to Bahraini Attorney General Ali bin Fadhel Al Buainain, the convicted individuals were also handed a fine of 1 million dinars each, and the CBI and other Iranian banks fined one million Bahraini dinars each plus confiscation of funds, which includes $148 million, €976 million, 53 million UAE dirhams and 235 billion Iranian rials.
The public prosecutor earlier said investigations had uncovered a major money laundering scheme operating through Future Bank.
The scheme allegedly involved illegal financial transactions for the benefit of Iranian entities, notably the central bank.
Investigations revealed alleged illegal banking practices and found that the CBI issued instructions to Future Bank on the use of an alternative and unapproved transfer system to complete banking operations for the purpose of concealing the source and movement of funds transferred through it and for the benefit of Iranian banks. The intent was to circumvent US sanctions imposed on Iranian entities.
BNA claimed that Future Bank officials, in cooperation with other officials of Iranian banks and the CBI, carried out the “transfer and receipt of more than $1.3 billion through the alternative system” as part of the so-called large-scale money laundering scheme.
The attorney general of Bahrain warned that further investigations are ongoing, including of international transactions by Future Bank and Iranian banks in contravention of the Law on the Prohibition and Combating of Money Laundering and Terrorist Financing, as well as banking laws and regulations, and that further prosecutions are expected.