Back on the 5th of January, we featured an original report on Bank Melli, the world’s largest Shariah-Compliant Financial Institution.
Now the Treasury has issued additional details on Shariah-Compliant Bank Melli’s proliferation activities and why the bank and its associated companies and business partners have been put under US, EU and Australian sanctions.
The next time someone refers to Shariah-Compliant Finance as “ethical” investing, ask them about Bank Melli, the world’s largest Shariah-Compliant financial institution…
March 3, 2009
Treasury Designates Companies Tied to Iran’s Bank Melli as Proliferators
Washington, DC — The U.S. Department of the Treasury today designated 11 companies under Executive Order 13382 for their ties to Iran’s Bank Melli. E.O 13382 is an authority aimed at freezing the assets of Weapons of Mass Destruction proliferators and those who support them. Bank Melli has been designated as a proliferator by the United States, the European Union, and Australia for its role in Iran’s nuclear and ballistic missile programs. Additionally, United Nations Security Council Resolution 1803 calls on all Member States to exercise vigilance with respect to activities between financial institutions in their territories and all Iranian banks, particularly Bank Melli.
“The international community has recognized the proliferation risks posed by Iran’s Bank Melli,” said Under Secretary for Terrorism and Financial Intelligence Stuart Levey. “We will continue to take steps to protect the integrity of the international financial system by exposing the banks, companies, and individuals supporting Iran’s nuclear and missile programs.”
Bank Melli provides financial services, including opening letters of credit and maintaining accounts, for Iranian front companies and entities engaged in proliferation activities. Further, Bank Melli has facilitated the purchase of sensitive materials utilized by Iran’s nuclear and missile industries and has handled transactions for other designated Iranian entities, including Bank Sepah, Defense Industries Organization, and Shahid Hammat Industrial Group.
Bank Melli Iran Investment Company (BMIIC) and Bank Melli Printing and Publishing Co. were designated because they are owned or controlled by Bank Melli. The following five entities were designated because they are owned or controlled by BMIIC: BMIIC International General Trading Ltd., Melli Investment Holding International (MEHR), Cement Investment and Development Company (CIDCO), Mazandaran Textile Company, and Melli Agrochemical Company. Two entities, MEHR Cayman Ltd. and First Persian Equity Fund, were designated because they are owned or controlled by, or acting or purporting to act for or on behalf of,directly or indirectly,MEHR and BMIIC. The remaining entities, Mazandaran Cement Company and Shomal Cement Company, were designated because they are owned or controlled by CIDCO.
BMIIC is one of the largest publicly listed companies on Tehran’s Stock Exchange with a current market capitalization of more than $1 billion. BMIIC’s portfolio includes investments in more than 100 companies across a variety of business sectors including, but not limited to, petrochemicals, industrial contracting, non-ferrous minerals, financial intermediaries, as well as the food and beverage sector.
The Bank Melli Printing and Publishing Co. is responsible for meeting the printing needs of Bank Melli’s domestic branches as well as other Government of Iran institutions. Melli Investment Holding International (MEHR) was incorporated in the Dubai International Financial Centre (DIFC), United Arab Emirates (UAE), in 2005 and is wholly-owned by BMIIC. BMIIC established BMIIC International General Trading Ltd. in 2004 in Dubai, UAE.In this manner, BMIIC used the DIFC as a free zone jurisdiction to carry outits investment-related activities.
MEHR Cayman Ltd. is domiciled in the Cayman Islands and is the investment manager and placement agent for First Persian Equity Fund, an investment vehicle launched in June 2007 that focuses primarily on companies listed on Tehran’s stock exchange. BMIIC advises First Persian Equity Fund and demonstrated its commitment to First Persian Equity Fund by agreeing to invest the equivalent of Euro 15 million as seed capital. In order to avoid liquidity issues in the Fund’s infancy, MEHR Cayman Ltd. was permitted to source First Persian Equity Fund’s stock portfolio from the existing holdings of BMIIC.
MEHR’s Executive Chairman, Chief Investment Officer and Managing Director occupy three of the four corporate director slots at First Persian Equity Fund. These same individuals have previously occupied or currently occupy senior positions at other Bank Melli affiliates, including MEHR Cayman Ltd., BMIIC International General Trading Ltd., and Future Bank, a Bahraini financial institution designated under E.O. 13382 in March 2008. Thus, BMIIC, via its subsidiaries in the UAE and the Cayman Islands, exerts a controlling interest on the overall strategic direction of, potential shareholders of, and investment decisions of, the First Persian Equity Fund.
CIDCO was established in 2004 by BMIIC as a holding company that specializes in the cement industry. According to BMIIC, CIDCO was created to manage its cement interests. These interests include the Mazandaran Cement Company, which CIDCO majority owns, and the Shomal Cement Company.
As a result of Treasury’s actions today, all transactions involving any of the designees and any U.S. person are prohibited and any assets the designees may have under U.S. jurisdiction are frozen.
Identifying Information on Designees:
BANK MELLI IRAN INVESTMENT COMPANY
Location: No. 2, Nader Alley, Vali-Asr Str., Tehran, Iran,
P.O. Box 3898-15875
Alt. Location: Bldg 2, Nader Alley after Beheshi Forked Road,
P.O. Box 15875-3898,Tehran, Iran 15116
Alt. Location: Rafiee Alley, Nader Alley, 2 After Serahi Shahid Beheshti, Vali E Asr Avenue, Tehran, Iran
Business RegistrationNumber: 89584
BANK MELLI PRINTING AND PUBLISHING CO.
AKA: Bank Melli Printing Co.
Location: 18th Km Karaj Special Road, Tehran, Iran, P.O. Box 37515-183
Alt. Location: Km 16 Karaj Special Road, Tehran, Iran
Business Registration Number: 382231
MELLI INVESTMENT HOLDING INTERNATIONAL
Location: 514, “Business Avenue” Building, Deira, PO Box 181878, Dubai, UAE
Trade License Number: 0107 (Dubai) issued 30 November 2005
MEHR CAYMAN LTD.
Location: Walker House, 87 Mary Street, George Town,
Grand Cayman, KY1-9002, Cayman Islands
CEMENT INVESTMENT AND DEVELOPMENT COMPANY
CIDCO Cement Holding
Location: No. 241, Mirdamad Street, Tehran, Iran
MAZANDARAN CEMENT COMPANY
Location: Africa Street, Sattari Street No. 40, P.O. Box 121, Tehran, Iran 19688
Alt Location: 40 Satari Ave. Afrigha Highway, P.O. Box 19688, Tehran, Iran
SHOMAL CEMENT COMPANY
Location: Dr Beheshti Ave No. 289, Tehran, Iran 151446
Alt. Location: 289 Shahid Baheshti Ave., P.O. Box 15146, Tehran, Iran
MAZANDARAN TEXTILE COMPANY
AKAs: Sherkate Nasaji Mazandaran
Location: Kendovan Alley 5, Vila Street, Enghelab Ave, P.O. Box 11365-9513, Tehran, Iran 11318
Alt. Location: 28 Candovan Cooy Enghelab Ave., P.O. Box 11318, Tehran, Iran
Alt. Location: Sari Ave., Ghaemshahr, Iran
MELLI AGROCHEMICAL COMPANY PJS
AKAs:Sherkat Melli Shimi Keshavarz
Location: Mola Sadra Street, 215 Khordad, Sadr Alley No. 13, Vanak Sq, P.O. Box15875-1734, Tehran, Iran
FIRST PERSIAN EQUITY FUND
AKAs: FIRST PERSIA EQUITY FUNDFPEF
Location: Walker House, 87 Mary Street, George Town, Grand Cayman, KY1-9002, Cayman Islands
Alt. location: Clifton House, 75 Fort Street, P.O. Box 190, Grand Cayman, KY1-1104, Cayman Islands
Alt. location: Rafi Alley, Vali Asr Avenue, Nader Alley, Tehran, 15116, Iran, P.O. Box 15875-3898
BMIIC INTERNATIONAL GENERAL TRADING LTD.
BMIIC Trading UAE
Location: P.O. Box 11567, Dubai, UAE
Alt. location: Deira, P.O. Box 181878, Dubai, UAE