Risky Business: Anniversary of Iran Intelligence Agency Creation Highlights Dangers of Business Engagement

As Companies Exit Iran, the Country’s Ministry Of Intelligence and Security (MOIS) is Responsible for Terrorism Abroad

Arguably Iran’s most feared state agency, the Ministry of Intelligence and Security (MOIS), on Saturday marked the anniversary of its establishment in 1984. The MOIS is “responsible for many terrorist attacks and assassinations of dissidents,” according to a joint Congressional-Pentagon report from 2012, provides support for Iran’s terror proxies and plays a “central role in perpetrating human rights abuses against” Iranian civilians. Most disturbing for publicly traded and privately-held Western businesses, the report states that MOIS agents may operate undercover in branches of Iranian banks or even in private businesses.

“Iran’s banking and business communities are corrupt, mismanaged, and polluted with risk,” said UANI President David Ibsen. “It is more likely than not that European businesses have financially supported and engaged with MOIS agents, as well as the IRGC. That’s part of the risk that businesses accepted by entering the Iranian market.”

There is no way for businesses to eliminate their risk of coming into contact with the MOIS or the Islamic Revolutionary Guards Corps (IRGC). Ensuring compliance is nearly impossible, exposing every company to tremendous risks. As Secretary of State Mike Pompeo wrote while serving on the U.S. House Select Committee on Intelligence, “ensuring an Iranian entity is clean exceeds the grasp of even the world’s most capable intelligence agencies — much less any bank or company.”

The reputational and financial risks of MOIS agents and the IRGC serving as local business partners is key to understanding why more than 80 percent of the Memorandums of Understanding signed in 2015 between global companies and Iran languished in that state.

The largest European companies that initially ignored these risks and entered the Iranian market are now making plans to close their business units within the country or have already done so, all to the great distress and dissatisfaction of the European Union’s (EU) foreign policy chief, Federica Mogherini.

Mogherini has sought to bind the interests of European companies with global security interests. To that end, she issued a joint statement with the French, German and British foreign ministers, that vowed to “protect European economic operators engaged in legitimate business with Iran.”

Business leaders rightfully aren’t paying attention. At this point, most of the large European companies have opted to reduce their exposure. Total is finished with Iran. So is Renault. And Siemens. Plus A.P. Moller-Maersk. As well as PSA Group. Including CMA CGM. And on and on.

The flight of responsible European and global capital has made it clear that the interests of the business community and EU policymakers have diverged. Corporate leaders are clearly disinterested in Mogherini’s vows to protect business interests and there is no appetite to assume massive risk in support of the foreign policy goals of the 28-nation bloc.

But EU leaders aren’t going to go down without a fight. Mogherini is now actively encouraging small and medium sized businesses to increase business with and in Iran.

“It is insulting to European business leaders who know the market risks best that European politicians would prod them to accept the risk of engaging with MOIS agents or paying local front companies controlled by the IRGC,” said Ibsen. “EU leaders would better align themselves with European business interests by insisting that Iran reform itself and change its behavior at home and abroad. Mogherini should be relieved that fewer European companies and European citizens are exposed to these risks, but she’s not. She’s a one-woman economic development team for the world’s largest state sponsor of terror. It’s preposterous.”