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Due Diligence

A report in the Italian daily L’opinione states that all the gallows used by the Iranian government to conduct public hangings are “made in Italy.” This is not the first time Italy’s companies have been embarrassed publicly by their business connections to Iran. A recent piece of investigative reporting in the newsweekly L’espresso, about which I’ve blogged, exposed more embarrassing deals—among which was listed Iran’s purchase of ultrafast patrol boats originally designed for Italian police patrol boats fighting sea smugglers. Iran reportedly bought the boats, and the plans to build them, in 1998 for its revolutionary guards. It’s not beyond the realm of possibility that, when Iran seized fifteen British sailors (and one iPod) in March 2007, it was using Italian-made boats. These exposures are sure to complicate Italy’s ambitions to join the EU-3—France, Germany and Great Britain—as Iran’s interlocutors on its nuclear dossier.

In truth, though, the embarrassment should not be Italy’s alone. European companies routinely supply Iran with seemingly harmless products, which Tehran diverts to less than transparent purposes. That’s the reason why, on October 11, the Financial Action Task Force—a 34-member intergovernmental body more widely known as the Egmont Group—issued a warning about Iran:

FATF members are advising their financial institutions to take the risk arising from the deficiencies in Iran’s AML/CFT regime into account for enhanced due diligence.

Italy is one of the 34 members of the Egmont Group. Given all the evidence of how its business ties with Iran strengthen the country’s repressive regime, isn’t it time that Italy follow FATF’s advice and show “enhanced due diligence” in its business with Iran—preferably by conducting none at all?



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