IRANIAN-CONTROLLED BANKS IN MALAYSIA

A reader wrote in this weekend, responding to my recent article recommending an increase in Country Risk for Malaysia, for a number of valid reasons, including Iranian presence in the banking sector. He asked that the names of the five Iranian-controlled financial institutions located in Malaysia be disclosed on this blog. Here's why that is unwise:

(1) The Iranian nationals operating those banks would soon learn that they had been exposed. They would then find other local banks, with a correspondent relationships to those named, and move their funds into new banks, unknown to us.

(2) However, readers of the information on my blog would then assume that other Malaysian banks were safe, and not Iranian-controlled. Western banks, relying upon what would be stale information, could be at risk.

(3) Western law enforcement agencies, who already know which Malaysian banks are Iranian-Controlled, would then be in the dark about the new banks.

A word to the wise: consider ALL Malaysian financial institutions to have elevated risk, because you cannot underestimate the abilities of Iranian sanctions evaders. They are already inside the Malaysian banking structure; therefore, the Iranian threats could come from any bank, non-bank, broker-dealer, or financial services firm in the country.