Documents published online show that Iranian Sina Bank has millions of dollars trapped in China's Kunlun Bank, which is refusing to release the funds due to fear of US Sanctions.
Kunlun Bank, a joint venture between Iran and China established in 2010, was originally designed as a sanction-bypassing financial mechanism to facilitate petroleum imports. In July 2012, the US Treasury Department took the unusual step of prohibiting US banks from conducting business with Kunlun Bank, effectively cutting its access to the US financial system Link to OFAC.

The 2015 Joint Comprehensive Plan of Action (JCPoA), also known as the “Iran Deal”, signed by the Obama administration, lifted most sanctions on Iran, rendering Kunlun Bank's original purpose obsolete. Nevertheless, the bank continues to play a significant role in bilateral trade between Iran and China, including both sanctioned and non-sanctioned transactions. Following the Trump Administration's withdrawal from the JCPoA in May 2018, Kunlun Bank's management was left scrambling to reinvent the bank’s purpose. In October 2018, Reuters reported that the bank has decided to stop receiving payments from Iran.

Documents released from the Mostazafan Foundation database, a massive conglomerate controlled by Iran's Supreme Leader, privde evidence of the bank's efforts to unfreeze or utilize funds held at Kunlun Bank.

The documents, which include correspondence between a Foundation subsidiary, Sina Bank, and Kunlun Bank, reveal a pattern of refusals by the Chinese Bank to release the funds. The documents show that Kunlun bank was determined to avoid evading sanctions. Despite repeated demands from Sina Bank, Kunlun bank has repeatedly declined to unfreeze Iranian funds, estimated at around 29 million Yuan.

Official letter sent by Sina Bank, noting that Chinese Kunlun Bank has refused the demands to unfreeze the funds.

A formal letter sent from the Mostazafan Foundation, indicating their discontent from Kunlun Bank’s lack of cooperation.

Page 18 of Sina Exchange’s annual report, noting Sina Bank’s account number in Kunlun Bank.

Evidence of efforts to release Sina Bank’s 29 million Yuan from Kunlun Bank, by using it to buy products from Chinese Company “Wonders Industrial Inc.”

WikIran commends Kunlun Bank’s decision to refuse participating in financing and conducting business with a the atrocities and the abuses of the Iranian Regime. All the documents used for this article were sourced from a bulk leakage of Mostazafan Foundation documents exposed on the Bakhtak Telegram channel, available at: t.me/bakhtak_1401.