FATF Back on Iran Parliament's Agenda

EghtesadOnline: As Iran's October deadline to complete the Action Plan set forth by the Financial Action Task Force draws near, lawmakers are renewing efforts to pass the related bills sent by the government months ago.

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10 September 2018

Behrouz Nemati, a member of Majlis Presiding Board, said on Sunday the parliament will discuss the bill to join the International Convention for the Suppression of the Financing of Terrorism after the summer recess is over in two weeks, Tasnim News Agency reported.

The Iranian government has sent four pieces of legislation to the parliament, which includes amending the country's AML/CFT law in accordance with the FATF standards and joining the United Nations Convention Against Transnational Organized Crime (Palermo) and the International Convention for the Suppression of the Financing of Terrorism.

In June, lawmakers refrained from approving Iran's accession to the latter convention, referring to uncertainties surrounding the nuclear deal in the wake of the US exit. Lawmakers wanted more assurances from Europeans that Iran will continue to benefit by staying in the nuclear deal, according to Financial Tribune.

This comes as the Guardians and Expediency councils continue to raise objections with the Palermo bill. Mohammad Kazemi, the deputy head of Majlis Legal and Judicial Commission, said members of the commission had last week worked to rectify the issues raised by the Guardians Council.

Fars News Agency also released a letter by Ayatollah Mahmoud Hashemi Shahroudi, written to the Guardians Council, in which he had said that the passage of the Anti-Money Laundering Amendment bill would be against the principles of Resistance Economy, investment friendly laws and economic security policies.

The Guardians Council, made up of six Muslim clerics appointed by Leader Ayatollah Seyyed Ali Khamenei and six jurists elected by the parliament, is charged with ensuring draft laws do not contradict religious laws or Iran’s Constitution.

The Expediency Council is the entity that steps in when the parliament and Guardians Council face a stalemate.

Kazemi said the opposition of Expediency Council to the bill has an "advisory" status, since the real disagreement lies between the Majlis and the Guardians Council.

Last month, the Guardians Council approved the amendment to Iran's Combating Financing of Terrorism Law ratified by the parliament earlier this year.

In June, the international group that monitors money laundering worldwide said Iran had until October to complete reforms that would bring it into line with global norms or face consequences of remaining in non-cooperative jurisdictions.

Iran has been trying to implement standards set by the Financial Action Task Force in the hope that it will be removed from a blacklist that makes foreign investors reluctant to deal with it.

In a statement issued in June after a week of deliberations in Paris, the organization said FATF is disappointed with Iran’s failure to implement its action plan to address its significant AML/CFT deficiencies.

“FATF urgently expects Iran to proceed swiftly on the reform path to ensure that it addresses all of the remaining items in its Action Plan ... We expect Iran to enact amendments to its AML and CFT laws ... in full compliance with the FATF standards by October 2018, otherwise FATF will undertake appropriate and necessary actions at that time,” it added.

Iran’s Leader Ayatollah Seyyed Ali Khamnei said on June 20 that the parliament should pass legislation to combat money laundering, according to its own criteria. However, Mahmoud Sadeqi, a reformist MP from Tehran, tweeted last week that some sources have affirmed that the Leader has given his consent to finalizing the remaining bills.

Forex Market

The foreign exchange market, which tends to be swayed by FATF-related news, had a stable day on Sunday with the exchange rates showing a downtrend.

According to reports from the unofficial market, the US dollar was offered for 129,000 rials and remianed below the resistance level of 130,000 rials.

The gold coin is also in the midst of a bearish market after months of ceaseless volatility. The benchmark Bahar Azadi gold coin fetched 41 million rials, according to Tehran Gold and Jewelry Association's website.

The Central Bank of Iran has allowed certified exchange bureaux to purchase hard currency from exporters. Currency exchange houses could then sell the currency at market rates "as per the CBI regulation".