In December 2007, I published an article entitled;
‘…US authorities turn screw on Iranian banks in the UK…’
Since the publication of that article, I have continued to engage in discussions with a wide variety of UK-based businessmen, and the list of persons on the receiving end of US bullying does not stop at financial institutions. Brokerage houses and oil trading companies have also received their visits from the ‘men in the dark blue blazers’, as they were described to me.
The message was the same. Do business of any kind in any currency with Iran, clear their trading requirements, handle their brokerage, engage with their oil handling, open LCs for them, and you will feel the wrath of the US Treasury!
Unable to get any response at all from any official body in the UK, even finding someone who would even return my calls made me begin to realise that there was a lot more to this issue than at first met the eye. It began to resemble nothing so much as the ‘…strange case of the dog in the night-time…’, or the dog that did not bark.
The Sherlock Holmes mystery the "Silver Blaze" was about the theft of an expensive race horse from its stable. During the investigation, Inspector Gregory of Scotland Yard asked Holmes if there was any particular aspect of the crime calling for additional study. Holmes replied "Yes," and pointed to "the curious incident of the dog in the night-time." Inspector Gregory replied, "The dog did nothing in the night-time." Holmes said, "That was the curious incident." In this case, the failure of the dog to bark when the horse was stolen showed the dog knew the thief. This was an important material fact; it considerably reduced the number of suspects, and eventually solved the case.
Growing increasingly suspicious that the British Government might have been turning a deliberate ‘Nelsonian’ blind eye to the wholly unlawful activities of agents of another government, I began to research who these shadowy figures might be and whose interests they might possibly represent.
I have done this with the specific intention of identifying methods and techniques which I would advise British businesses to adopt if they become the recipients of such unlawful conduct in future, as a means of protecting their own commercial interests, and how to respond to these unlawful threats in the future.
Let us be really clear of our terms of reference here. No agent of a foreign government can come to the UK and dictate to any British business how or where that business will carry out its lawful activities. We operate in a highly rule-oriented business environment. The risk-based approach which now determines our every compliance move demands that we engage in a pattern of behaviour which can be scrutinised in the finest detail by our regulatory supervisors. Serious penalties exist for any perceived failure to comply with the new rules and regulations. What is called for is the highest degree of transparency and certainty in the way in which the regulatory environment is enforced.
Receiving unattributable threats of dire commercial consequences from agents of a foreign state, if British banks do not fall into line with their unlawful demands, is not an acceptable state of affairs. Our institutions have every right to expect that the Government will protect them, and once confronted with the evidence of such conduct, should make every move to ensure that the foreign state was appraised, in no uncertain terms, of the displeasure felt by Her Majesty’s Government at such conduct, coupled with stringent demands that such behaviour will cease forthwith.
And what did we get in response when such evidence was laid in front of the relevant Government official? Sadly, we got a predictable response from an aptly-named man, many of whose public outpourings in the money laundering debate leave much to be desired. (See Complinet - Regulus, August 1 2006). Ed Balls made it abundantly clear that he was going to do absolutely nothing about the allegations laid at his door, and, having washed his hands of any responsibility for protecting the British commercial interest, left them to the tender mercies of the American bullies!
So, who are these latter-day ‘new centurions’, these ‘born-again avenging angels of the wrath-to-come?’
Step forward a motley collection of what Sasan Fayazmanes, Chair of the Department of Economics at California State University, Fresno, has described as ‘…individuals who make US foreign policy, particularly the "neoconservatives," and who represent a privileged group of people with a unique and peculiar view of the world. To these "neoconservatives" waging wars against Palestine, Iraq, Lebanon, and possibly Iran and Syria, might appear to be in the "interest" of the US, even though in actuality such policies might be very harmful to the interest of ordinary citizens of the US, particularly in the long-run...’
In an article entitled ‘…The US, Israel and Iran: An Interview with Sasan Fayazmanesh…’, published on 19th March 2007, Ms Fayazmanesh expands her arguments. She states;
‘…When the Bush Administration came to power, more radical members of the Washington Institute, such as Paul Wolfowitz and Richard Perle, took over the formulation and implementation of the White House Middle East policy. These "neoconservatives" were closely linked to the (Israeli) Likud party members, particularly Binyamin Netanyahu. As such, their idea of "containment" of Iran and Iraq went beyond the roundabout way of passing sanctions to ruin the economy of these countries, bringing about discontent, causing revolt and then overthrowing their governments; they advocated a more direct way for "regime change": using the military might of the US to attack these countries. Yet another such individual is Stuart Levey, the present Treasury Department's Under Secretary for Terrorism and Financial Intelligence. Levey has been working zealously to stop foreign banks from dealing with some Iranian banks. In 2005 Stuart Levey gave an address at AIPAC that began with: "It is a real pleasure to be speaking with you today. I have been an admirer of the great work this organization does since my days on the one-year program at Hebrew University in 1983 and 1984. I want to commend you for the important work that you are doing to promote strong ties between Israel and the United States and to advocate for a lasting peace in the Middle East." Then he goes on to talk about what his office does and how "[w]e levy economic sanctions to pressure obstructionist regimes, and we have the ability to freeze the assets of wrongdoers."
Yes, step forward Stuart Levey, Under Secretary for Terrorism and Financial Intelligence.
Mr Levey is the leading influence behind the brave boys who have been running around London issuing their threats against British banks. Mr Levey is proud of his actions and makes little attempt to hide his ambitions. He stated in a speech to the American Enterprise Institute for Public Policy Research on September 8, 2006;
‘…As our government took stock of all of its tools to combat terrorism and the Executive Branch was reorganized after September 11, President Bush, members of his Cabinet, and the Congress recognized that the Treasury Department had unique authorities that could contribute to the fight. This was the genesis of the office I oversee, the Office of Terrorism and Financial Intelligence...’
Mr Levey has learned some very important lessons while in the employ of the US government. He has learned how to position his ambitions and those of his office in such a way that to the uninitiated, they seem almost benign. He has learned how to apply soft words to re-interpret harsh deeds, and he has learned the same lesson that every con-man knows which is ‘if you are going to mislead someone, then do it in the biggest way possible. People will be much more likely to believe you and far less likely to disregard you.
When it comes to the way he interprets his role and that of his officers, he starts predictably, but watch how the message becomes more and more polarised as he gets into his stride;
‘…To maximize the effect, we try to apply these measures in concert with others. Whenever possible, we act with a partner or a group of allied countries. In some cases, we can designate a target at the United Nations. We also have important new regulatory authorities in the United States, such as Section 311 of the USA PATRIOT Act. Section 311 allows us to designate a foreign financial institution or jurisdiction to be of "primary money laundering concern." The impact of that particularly has been more powerful than many thought possible…targeted financial measures warn innocent people not to deal with the designated target. And those who might still be tempted to deal with targeted high risk actors get the message loud and clear: if they do so, they may be next… A second powerful lesson we've learned is that -- particularly in the context of "targeted" sanctions -- we share common interests and objectives with the financial community. Financial institutions want to identify and avoid dangerous or risky customers who could harm their reputations and business. And we want to tell them where those risks lie…’
‘…As I have travelled and met with bank officials abroad, I have learned that even those institutions that are not formally bound to follow U.S. law pay close attention to these targeted actions and often adjust their business activities accordingly. Why? There are two reasons: First, regardless of the underlying law in any particular country, most bankers truly want to avoid facilitating proliferation, terrorism, or crime. These are responsible corporate citizens. Second, avoiding government-identified risks is simply good business. Banks need to manage risk in order to preserve their corporate reputations. Keeping a few customers that we have identified as terrorists or proliferators is not worth the risk of facing public scrutiny or a regulatory action that may impact on their ability to do business with the United States or the responsible international financial community...’
The insouciance Mr Levey adopts is truly breathtaking. He is not telling us how to arrange our business affairs, we are merely ‘adjusting’ our own affairs willingly, even though, as he admits, we are not bound to follow US law. Why are we doing this? Well, apparently we don’t want to keep a few customers ‘…that may impact on our ability to do business with the United States or the responsible international financial community…’
You see, it’s all quite voluntary and absolutely normal because we are ‘…responsible corporate citizens...’
Well, if that’s the case, why do selected Americans deem it necessary to lie so bare-facedly about the present situation in Iran, about the nuclear issue as an example, even when their own intelligence agencies have categorically told them that Iran is not pursuing a nuclear weapon capability? Why do they not provide the asserted evidence of the movement of funds to Hizbollah, which Bank Saderat has repeatedly asked for, and upon which basis they subject Bank Saderat to worldwide calumny. Consider the following statement from Levey;
‘…Iran provides Hizballah with hundreds of millions of dollars each year, which is why I have said that Iran is the central banker of terror. It is remarkable that Iran has a nine-digit line item in its budget to support Hizballah, Hamas, and other terrorist organizations at the expense of investing in the future of its young people...’
‘…As we continue to deal with the challenge presented by Iran's pursuit of a nuclear weapons program, we must also confront its support for terrorism. We have taken several steps to do so this week…’
‘…We have cut off Bank Saderat, from the U.S. financial system. Here is why: This bank, which has approximately 3400 branch offices, is used by the Government of Iran to transfer money to terrorist organizations. For example, since 2001, a Hizballah-controlled organization received $50 million directly from Iran through Saderat. Hizballah uses Saderat to send money to other terrorist organizations as well. Hizballah has used Bank Saderat to transfer funds, sometimes in the millions of dollars, to support the activities of other terrorist organizations such as Hamas in Gaza. We will no longer allow a bank like Saderat to do business in the American financial system, even indirectly…’
George Bush was pushing this same old story this week in the Middle East. If he wants to be believed, why will his agent, Stuart Levey, not provide the evidence to Bank Saderat to back up his assertions? What has he got to hide from the truth being publicly seen. Or is it more likely that his political affiliations make it in their interests to keep up the pressure on Iran but without really telling the truth?
Levey again;
‘…Our actions this week are a sign of the costs that we will impose on the Iranian people if the leadership chooses to remain on its current path of defiance. The regime will end up isolating Iran from the world community, with reputable financial institutions becoming increasingly unwilling to handle Iran's business. The Iranian people deserve better than a government willing to sacrifice their economic well-being to pursue weapons they don't need and policies that result in the deaths of innocent civilians...’
Yet again, Levey knows, because his own intelligence agencies have told him, Iran is not seeking to build weapons, but why let the facts get in the way of a good foreign policy!
So, what can we do if Mr Levey’s blue knights come to our offices and start bullying us with their threats.
The first thing to do is to remember that it is a very serious criminal offence for anyone to make what is called ‘…an unwarranted demand with menaces…’
Under s21(1) of the Theft Act 1968, in English law, a person commits the offence:
If, with a view to gain for himself or another or with intent to cause loss to another, he makes any unwarranted demand with menaces; and for this purpose a demand with menaces is unwarranted unless the person making it does so in the belief:
(a) that he has reasonable grounds for making the demand; and
(b) that the use of the menaces is a proper means of reinforcing the demand.
The Act uses the word "menaces" which is considered wider in scope than "threat" and involves a warning of any consequences known to be considered unpleasant by the intended victim. This covers the spectrum from actual or threatened violence to the victim or others, through damage to property, to the disclosure of information.
It is manifestly clear that the US agents, in making their threats that the US Government will subject a British bank to hostile treatment if they continue to undertake lawful commercial business with Iranian entities, are guilty of such an offence, and the persons making such a threat can be imprisoned for up to 14 years. They cannot possibly have any reasonable grounds for making such a threat, they are acting completely illegally, and the use of the menaces is completely improper.
The loss to be caused does not need to be sustained by the recipient of the threat, it could just as easily be the Iranian counterparty who suffers.
So, at the first sign of any such threat, don’t rise to it or start to protest. It would be wise to just excuse yourself from the meeting, slip out of the room and make an immediate telephone call to your local police office and ask that police officers be sent immediately. State the fact that you are on the receiving end of a serious blackmail threat and that the suspects are still in your offices. You will find the police will get there quickly enough. Let our US friends try and talk their way out of their unlawful conduct to a couple of detectives, and see how far they get.
Alternatively, if the threats you have already sustained are causing you concern about what you can do lawfully or what you might want to do in future, then your institution should be considering undertaking preliminary legal action in the US. I have spoken to US lawyers and they are adamant that no US agency should be conducting themselves in this manner, and that if any such threats have been made, such persons can be called to account in the US courts, and they can be required to identify the evidence upon which they seek to rely to back their assertions of terrorism or criminality.
One New York lawyer of my close acquaintance said to me;
‘…It may have escaped your notice, but the USA is still a country with the rule of law. If these crazies want to threaten law-abiding people, they must not do so without the clearest proof of probable cause and they have to demonstrate the evidence they seek to rely on. They can be required to prove the veracity of that evidence, and in many cases we succeed in demonstrating that it is nothing but hot air…’
I suspect that the mere suggestion that your bank will seek to test the validity of these threats in the US courts will be enough to get these people out of your offices. But what the hell, call the cops first and let them spend a few hours in the cells at Wood Street nick, while their Embassy tries to determine whether they have diplomatic status!
