Iranian Parliament Firm on Preventing FATF Blacklisting

EghtesadOnline: Majlis Economic Commission, a major force in Iran's Parliament, is committed to ensure the passage of pending bills aimed at completing its action plan with the Financial Action Task Force, a member of the commission said.

News ID: ۷۴۵۶۷۷

22 July 2018

Fatemeh Hosseini also stressed that this is at the behest of the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei, IBENA reported.

"FATF was discussed in a meeting that the members of parliament had [with Ayatollah Khamenei] and the Leader emphasized on eliminating regulatory gaps by devising laws on combating financing of terrorism and anti-money laundering," Financial Tribune quoted her as saying.

"Based on this, MEC is seriously following up on AML/CFT issues so that Iran won't enter the [FATF] blacklist again."

In late June, the Paris-based intergovernmental watchdog, which is tasked with devising AML/CFT regulations and standards and monitoring countries' progress, again suspended active countermeasures against Iran. It was a victory for the administration of President Hassan Rouhani, which has been fighting off local hardliner factions opposed to ratification of FATF-related bills.

Now Iran has until October 2018 to finalize its AML/CFT amendments bills and two other bills aimed at joining the Palermo Convention and the International Convention for the Suppression of the Financing of Terrorism.

Asked about the politicized nature of the bills, the MEC member said it may be true, "but these laws are a basic requirement for the banking and economic systems, and interaction with the world" and a way of showing the world that Iran is committed to moving toward more transparency.

Hosseini pointed out that the country needs to realize an 8% annual GDP growth rate if it wants to achieve goals set in its long-term development plans and a major factor in realizing that is by boosting transparency in the banking system, which would help lower credit risk and make the banking system more dynamic.

"Some concerns about FATF are that all laws must be approved as cited internationally, but the laws will be localized to meet the needs of the country," she said, adding that "this localization must be in a way that does not harm the original mandate of the laws".

Mousa Ghaninejad, an economist and researcher, told IBENA on Saturday that ratifying FATF-related bills is a must and a national issue as he decried those "who are pursuing factional interests instead of thinking about national interests and attack the government using FATF as an excuse".

"At present, economic issues such as crises and inflation are not the only determining issues, as international ties with the West and with Russia and China are of utmost importance in deciding the fate and future of Iran's economy," he said.

Palermo Convention Controversy

The Palermo Convention has become controversial in Iran, as a number of issues have cast their shadows on its final ratification.

Last week, Guardians Council Spokesman Abbasali Kadkhodaei said the powerful constitutional watchdog has found flaws in the Palermo Convention bill, but has rejected the bill since it is mostly legal in nature and must be submitted by the judiciary rather than the government.

Then, on July 17, Ayatollah Mahmoud Hashemi Shahroudi, the head of Expediency Council, an entity that resolves disputes involving the parliament and Guardians Council, wrote a letter to GC Secretary Ahmad Jannati, listing the shortcomings of Palermo Convention.

"There are ambiguities in the [Palermo Convention bill] as approved by the parliament" that can be misused against national security and interests, he wrote.

This prompted some local media to interpret the letter as a rejection of FATF measures. However, the deputy head of Majlis Legal and Judicial Committee on July 20 reassured otherwise.

"Measures related to FATF are still subject to a review in the parliament and the rejection of the bill aimed at joining Iran to the Palermo Convention will create no impediment to this," Mohammad Kazemi also told ICANA, the official news outlet of the parliament.

On the other hand, another MP claimed on Saturday that "the Guardians Council says Palermo [Convention ratification] is not cancelled and it can be resubmitted after some changes are made".

Jalal Mirzaei also said that he believes the Expediency Council vote runs counter to its mandate and so the GC considers the Palermo Convention bill to be still in play.