Although various studies have examined the economic effects of money laundering, there is a lack of studies, especially in the country, on the impact of shocks resulting from economic sanctions on money laundering. Therefore, in this study, the impact of negative shocks of economic sanctions on the volume of money laundering in Iran was investigated using a structural vector autoregression (SVAR) model during the period 1994-1999.
The results showed that shocks of -5, -10 and -20 percent in crude oil export revenue increase the volume of money laundering in Iran by a maximum of 3.66, 4.67 and 7.63 percent, respectively. Also, shocks of -5, -10 and -20 percent in non-oil exports increase the volume of money laundering in Iran by a maximum of 2.24, 3.26 and 6.24 percent, respectively. In addition, shocks of -5, -10 and -20 percent in capital and intermediate goods increase the volume of money laundering in Iran by a maximum of 1.11, 2.12 and 5.22 percent, respectively. On the other hand, shocks of +5, +10 and +20 percent in exchange rate increase the volume of money laundering in Iran by a maximum of 3.01, 5.72 and 12.97 percent, respectively. Due to economic sanctions, economic growth, decline, exchange rate fluctuations, increases, inflation rates, increases and income inequality also increases, money laundering grows as a natural reaction of the informal market.
Therefore, solutions must be simultaneously economic (controlling exchange rates and inflation), social (reducing income inequality), institutional (regulations and supervision), and technological (artificial intelligence and blockchain). Only with this combination can the volume of money laundering be reduced and public trust and sound investment be strengthened.