Iran's Expanding Latin American Reach
By Douglas Farah
I have touched on the topic before, but from spending time on the ground in the region in recent months it is clear that Iran is making significant inroads into the Latin America financial services sector and other areas.
In Ecuador, as I have noted before, Iran has set up a way for its central bank to deposit money directly into the Ecuadoran central bank. The stated purpose is to allow $120 million in credit to flow to importers and exporters in both countries to facilitate trade.
The only catch is that there is virtually no trade between the countries. In recent years (2006 and 2007, the latest available) Ecuador reported zero exports to Iran and imports of less than $500,000 each year. Like the Iranian financial institutions in Venezuela, the economics of the case simply make no sense.
According to the "Protocol of Cooperation" between the Central Bank of Ecuador and the Export Development Bank of Iran (EDBI), which is under Treasury Department sanctions for supporting Hezbollah and the Quds Force, Iran was also willing to take an unusual step.
Point 6 of the agreement, which I have, states that:
EDBI manifests its readiness to establish a branch of Banco Internacional de Desarrollo (BID) in the Republic of Ecuador.
This is interesting because the BID is reportedly a Venezuelan bank, which the EDBI would have no over, including where it opened branches. But as I wrote earlier, the BID is wholly owned (all 40,000 shares) by Bank Saderat, an Iranian bank under U.S. and UN sanction. My full blog is here.
