Slovenia’s state prosecutor has opened a preliminary investigation into claims that the country’s biggest state-owned bank, Nova Ljubljanska Banka (NLB), may have laundered nearly €1bn from Iran between 2008 and 2010, breaking an international embargo and failing to enforce rules on the financing of terrorism.
Slovenian media reported in July that 40-50 transactions took place every day from NLB bank to more than 30,000 accounts around the world, including some clearly held in fake names, such as Donald Duck and Mickey Mouse. The allegations were not further elaborated until the opposition reopened the case last week.
NLB confirmed to EURACTIV that some of its international transactions had been reviewed internally and by the central bank in 2010 and no sanctions were imposed.
“Both reviews resulted in a number of findings that served as the basis for major changes in how the area of prevention of money laundering and terrorism financing was organised and equipped,” the bank said in a written reply, adding that “the responsible persons from that period are no longer employed at NLB”.
The Slovenian government confirmed that “in the case mentioned, the Office for Money Laundering Prevention (OMLP) received a suspicious transaction report in June 2010 in relation to money laundering and Terrorist Financing Act”.
The finance ministry said in a written reply that, at the time, the OMPL “sent more than 30 requests to different state authorities and obliged entities as well as requests to over 30 foreign Financial Intelligence Units”.
“On the basis of data received and assessed the OMLP established in this case grounds to suspect money laundering under Article 245 of the Slovenian Criminal Code and also some grounds to suspect terrorist financing under Article 109 of the Slovenian Criminal Code, of which the OMLP has informed the competent authorities,” the finance ministry added.
Prime Minister Miro Cerar told parliament last week, after the opposition raised the issue: “At this point, the state prosecution, which has launched pre-trial procedures, still has to confirm or reject the existence of grounds to suspect money laundering. I’m waiting for this piece of information,
The scandal centres around Iranian and British citizen Iraj Farrokhzadeh, who opened accounts at the bank in December 2008 for the company Farrokh Ltd., after authorities in Switzerland shut down his accounts at UBS.
Farrokhzadeh is thought to have moved money for Iran’s Export Development Bank (EDBI), which was blacklisted by the European Council over its connection to weapons proliferation and payments to front companies run by Iran’s ministry of defence.
“The Export Development Bank of Iran (EDBI) has been involved in the provision of financial services to companies connected to Iran’s programmes of proliferation concern and has helped UN-designated entities to circumvent and breach sanctions,” the EU officially recognised in its restrictive measures against Iran.
In addition, Farrokhzadeh himself was on Interpol’s most wanted list at the time.
The Bank of Slovenia issued an order banning the transactions in December 2010, which NLB took nine days to implement. By that time, Farroukhzadeh had moved his operations to Russian banks.