As the P5+1 nuclear talks enter an extended phase, Iran continues holds its breath for sanctions relief to ease its ailing economy. However, international companies adhering to western standards of compliance struggle to conceive of business relationships with Iranian companies tied to a murky recent past.
Tejarat Aria Gostar Iranian Navid Co. is an example of one such company with a very murky past by virtue of its association with a number of highly controversial figures. The company and its two directors Mohammadreza Aghaei and Yousef Zarei Nikjeh are tainted, perhaps rendered untouchable, by their close association with a controversial third company director, Hassan Afrashtehpour, at a time when international trade is rigorously government by onerous anti-bribery legislation including the FCPA and UK Bribery Act.
Hassan, along with brother Daoud Afrashtehpour, has a very colorful criminal past which include multiple convictions for corruption, embezzlement and bribery – some in conjunction with serving regime officials – and allegations of international sanctions violations.
In November 1997, Hassan and Davoud Afrashtehpour were arrested in the Iranian city of Tabriz on charges of ‘economic sabotage’. They were subsequently sentenced to 25 and 20 years respectively for the embezzlement of 60 million US dollars from the state-owned Bank Saderat as well as receiving associated convictions for bribery and the falsification of documents. Their case was also linked to the high-profile conviction of Sharham Jazarezi-Arab, an Iranian entrepreneur and businessman, for corruption involving several officials in the Islamic Republic.
The brothers avoided serving extended jail time and successfully brokered a deal with the regime for their release. This is widely understood to be the first of many deals brokered with the post revolution regime. The Afrashtehpour brothers are rumored to have reached an business arrangement with the regime to bypass OFAC sanctions by supplying the regime with key imports from abroad. Tejarat Aria Gostar Iranian Navid Company was incorporated just six days after the European Union passed landmark legislation sanctioning trade with Iran.
In 2006 Hassan Afrashtehpour found himself embroiled in a further 60 million US dollar embezzlement and corruption scandal. Iranian press reports claimed that Afrashtehpour had received the payment in return for fraudulently importing goods into the country. It was reported at the time that Afrashtehpour keeps his money outside the country, again to circumnavigate onerous banking sanctions and to protect his wealth from domestic political prosecution.
However, the negative associations for Tejarat Aria Gostar Iranian Navid Co. and its two directors Mohammadreza Aghaei and Yousef Zarei Nikjeh do not stop there. In a further scandal relating to illegal imports in May 2010, Iranian press outlets reported that one of the Afrashtehpour brothers was involved in a business venture the extremely controversial figure, Akbar Khoshkush, to illegally import of large volumes of mobile phones from Dubai for sale in Iran.
Koshkush was a former member of the Iranian Ministry of Information (now known as the Ministry of Intelligence and National Security (MOIS)) is infamous for his involvement in the “death squad” murders of several Iranian dissidents in exile abroad in the late 1980s and early 90s. This series of murders, which took place between 1988 and 1998 came to be known as the ‘Chain murders of Iran’. Koshkush is also widely understood to have ordered the IRGC to arrest and execute opposition members inside Iran.
In a world where the conduct of corporate due diligence on potential business partners has become a standard requirement for international businesses to ensure compliance with onerous and proliferating anti-bribery legislation, it is difficult to envisage how companies might make the calculation that engaging with Iranian business partners such as Tejarat Aria Gostar Iranian Navid Co. could be worth the risk. Therefore, the easing of sanctions and the opening up of trade opportunities with Iran may well not provide the required panacea for its economic woes.