What Zarrab’s Arrest means for Rouhani

By Enis Erdem Aydin, for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.

Reza Zarrab, the dual Iranian and Turkish citizen arrested in the United States on charges of money laundering and banking fraud to evade sanctions on Iran, is not just any businessman. When he was caught up in graft allegations in Turkey in 2013, he surfaced as an alleged associate of Babak Zanjani, the Iranian tycoon recently sentenced to death in Tehran.

Zarrab’s March 19 arrest sits at the nexus of Turkey-Iran-US relations — with potential implications for all sides. While much focus is on how his detention may be bad news for Turkish President Recep Tayyip Erdogan and the ruling Justice and Development Party (AKP), the real story is that this is much more good news for Iranian President Hassan Rouhani.

The sanctions on Iran propelled the rise of individuals subcontracted to circumvent the restrictions. This shady web, led and incited by the administration of former President Mahmoud Ahmadinejad and its affiliates in the Islamic Revolutionary Guard Corps (IRGC), bred corruption and lawlessness. As a letter by Zarrab cited in his indictment states, this web “wisely neutralizes the sanctions and even turns them into opportunities by using specialized methods.”

Since taking office, Rouhani has systematically sought to discard corrupt remnants of the Ahmadinejad era and also counterbalance the IRGC and other hard-line elements. Indeed, in the past two years, Zanjani has been sentenced to death for allegedly embezzling oil money, businessman Mahafarid Amir Khosravi has been hanged for defrauding Iran’s banking system and Ahmadinejad’s First Vice President Mohammad Reza Rahimi has begun serving a 5-year prison term for bribing members of parliament. Though instigated by US authorities, Zarrab’s arrest may be viewed as part of this trend.

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