Tayyebnia Presses for FATF Compliance

EghtesadOnline: Economy Minister Ali Tayyebnia said to avoid the blacklist of the Financial Action Task Force, Iran must fulfill the organization's requirements or else the country will not be able to regain its positive status it enjoyed in the past.

News ID: ۷۳۷۲۳۷

28 September 2016

"If FATF requirements are approved by relevant decision-making bodies, we will be able to join the list of countries complying with the organization, but if those requirements are not fully implemented, we will not be able to get to where we were before," Tayyebnia told lawmakers in an open Majlis session on Tuesday, Banker.ir reported.

In recent weeks, tensions have risen over Iran's cooperation with FATF–an anti-money laundering initiative–with some conservatives claiming the deal would expose the country's sensitive financial data to its adversaries.

"The intergovernmental organization is tasked with devising standards and procedures to combat money laundering and assess countries in their efforts to curb terrorism financing," Tayyebnia said.

Countries are categorized under three groups based on their degree of cooperation with the organization:  those that have fully embraced it standards, those which have majorly accepted them and those that have done so only partially.

The economy minister noted that in the past, Iran was counted among the countries collaborating with FATF, but is currently blacklisted.

"For a country leading in combating corruption and money laundering, such a status is not appropriate," he said.

On recent controversies surrounding Iran's accession to FATF, namely regarding the disclosure of the country's financial information, Tayyebnia reassured the Majlis that the task force "has no database or any medium through which it could transfer information" and all information will be communicated voluntarily and through bilateral or multilateral agreements between countries.

He noted that in its decree of 2010, the Supreme National Security Council clearly required the government to create a committee specializing in the exchange of data pertaining to individuals and companies with other countries.

Furthermore, all economic entities, including the tax administration, customs, and stock market, will conduct business under that committee, which is directly supervised of the Ministry of Intelligence.

Fighting Terrorism

According to Tayyebnia, within this framework, Iran is sharing information to counter the financing of the self-styled Islamic State and other terrorist groups with Armenia, Syria, Russia, Iraq, Brazil and South Africa.

"Information sharing will be based only on national interest and our own choices for combating extremist groups and corrupt movements," he said.

Therefore, he added, no one will have access to information pertaining to Iranian banks and financial institutions.

It has been said that further collaboration with the FATF will lead to sanctions over certain Iranian entities and individuals, to which the minister responded firmly: "That is absolutely not true."

He emphasized that cooperation with such an organization will not entail sanctions, reports Financial Tribune.

Referring to allegations that the government has overstepped its jurisdiction and bypassed the parliament, the minister said the answer is no again.

"To meaningfully implement anti-money laundering policies, certain measures must be undertaken that fall under the jurisdiction of the government," he said.

Tayyebnia elaborated that software has been installed in the banking system to identify murky deals.

"In such cases, there is no need to turn to the parliament, but when a parliamentary approval or amendment is required, the parliament will be consulted," he said.

Majlis Approval

Chairman of Majlis Economic Commission Mohammad Reza Pour-Ebrahimi announced on Sunday that lawmakers have prepared a bill that would oblige the government to subject Iran's cooperation with the Financial Action Task Force to the parliament's approval.

"A number of parliamentarians have crafted a bill to commit the government to seek Majlis consent for any agreement with FATF and the first draft of the double-urgency bill will be presented to the parliament this week," Pour-Ebrahimi was quoted as saying by Banker.ir.

The intergovernmental FATF develops policies to combat money laundering and financing of terrorism. Iran's continued membership in the task force attracted much controversy lately, with critics claiming that the country would have to disclose sensitive financial information.

"The bill's approval would be in line with helping the government. It would increase the government's bargaining power against FATF requirements and that is important because a number of FATF requirements contradict national values and the constitution," he said.

"We do not wish to stop the implementation of FATF membership; our goal is to create a framework within which the government could negotiate and not be compelled to acquiesce to their every demand."

The senior lawmaker noted that based on a decree of FATF, Iran would have to amend a law pertaining to terrorism financing that was previously approved by the parliament "which means that we would be obligated to change one of the laws of our country and that would be a direct meddling in the affairs of the country".

Pour-Ebrahimi noted that in the Law to Counter Terrorism Financing, the parliament has stressed that "liberation movements" are not terrorist groups, but if FATF has its way, the country would have to let the United Nations Security Council to determine what groups are terrorists.

"In another decree, Resolution 1267 of the UNSC has been invoked and if the Lebanese Hezbollah were to be designated as terrorists, Iran will face a serious challenge," he said.

Worrisome Claims

According to Pour-Ebrahimi, all of Iran's monetary data would have to be surrendered to the FATF without any exceptions, and "no one in their right mind would hand over his country's information in totality".

On September 6, the High Council on Anti-Money Laundering issued a statement in defense of collaboration with FATF. The first point raised in the statement was about the extent to which Iran would have to disclose information.

"The FATF does not engage in the collection of data pertaining to specific transactions and deals, as the group has no mechanisms in place to receive info from banks and countries," read the statement.

Referring to Iran's nuclear deal with world powers, the parliamentarian said by completely studying FATF requirements, it becomes obvious that the country would have to accept more limitations, with no guarantees from the western counterparts of receiving benefits.