Malaysia will not recognize economic sanctions imposed by the United States or any other individual country, a top government official said yesterday, following claims from U.S. officials that Iran was relying on Malaysian service providers to sell U.S.-sanctioned oil in the region.

Home Minister Saifuddin Nasution Ismail said that he delivered the message “nicely” during a meeting in Kuala Lumpur yesterday with Brian Nelson, the U.S. Treasury Department’s top sanctions official.

“I emphasized that we will only recognize sanctions if they are imposed by the United Nations Security Council,” Saifuddin told reporters after his meeting with Nelson, the U.S. Treasury under-secretary for terrorism and financial intelligence, the Straits Times reported. “We don’t recognize any sanctions imposed by an individual country,” he added. “The U.S. delegation respected our stance.”

This week, a delegation led by Nelson and Neil MacBride, Treasury’s general counsel, has visited Malaysia and Singapore in order to discuss its concerns that Iran is using Malaysian entities to finance militant groups, including Hamas, whose deadly raids into southern Israel prompted the ongoing devastating Israeli assault the Gaza Strip.

The meeting came a few days after an anonymous U.S. official told reporters from Reuters that the U.S. government had observed a “concerning uptick” in money moving to Iran and its regional partners, including Hamas, via the Malaysian financial system, including through charities based in the country. “We are concerned about Hamas’ capacity to fundraise in the region, including in Malaysia, so want to have a direct conversation about those concerns,” the official said.

The source declined to name the suspect charities, though the U.S. Treasury Department in December imposed sanctions on four Malaysia-based companies it accused of helping Iran’s production of drones. Nelson also said yesterday that the sanctions, which also targeted entities in Iran, Malaysia, Hong Kong, and Indonesia, had been “impactful.”

Speaking to the local media after yesterday’s meeting with Saifuddin, Nelson said that the U.S. was particularly concerned about transfers of sanctioned Iranian oil in the waters off Malaysia’s coast. “These are ship-to-ship transfers, particularly at night, which we see from time to time,” he said, adding that they are “designed to obfuscate the origin of the commodity, in this case, Iranian oil.”

Saifuddin said after the meeting that he had “reiterated Malaysia’s commitment” to combating terrorism financing, and that the country had a clear strategic plan to tackle illicit financing activities and money laundering.

“Malaysia is a country that upholds the rule of law, and we have clear legislation to manage the issues raised,” he said. “The U.S. delegations have taken note of this and they know precisely what are the steps taken by the Malaysian government on the issue of terrorism, extremism, and all those.”

Saifuddin’s polite but firm stance on sanctions highlights the importance for Malaysia’s government resistance, or being seen to resist, U.S. pressure to shift course on the Israel-Palestine conflict. Support for the Palestinian cause is a subject of cross-partisan consensus in Malaysia, and Prime Minister Anwar Ibrahim’s administration has been harshly critical of Israel since the outbreak of the current conflict. Speaking at a large pro-Palestine rally in Kuala Lumpur several weeks after the Hamas assault on southern Israel, Anwar described the ruthless Israeli response as “the height of barbarism in this world,” and called on Israel to end its occupation of Palestinian territories.

Malaysia has also maintained close relations with Hamas; in October, Anwar took a call with Ismail Haniyeh, the head of Hamas’ political bureau, and described Iran’s recent drone and missile at Israel as a “legitimate act” in response to Israel’s “barbarous” attack on Iran’s consulate in Damascus.

All of this also reflects the difficulties that the U.S. government is having in shaping global opinion on the Israel-Palestine conflict, and the ongoing war in Gaza. One observer on X (formerly Twitter) made the point today that if Washington wishes countries like Malaysia to take a tougher stance against Iran, one thing it could do is to “push Israel to accept a humanitarian ceasefire in Gaza.“

Source » thediplomat