Iran: Optimism Over AML Legislation Before FATF Deadline

EghtesadOnline: Despite the opposition of some factions about the country falling in line with standards set by the Financial Action Task Force, optimism abounds among moderate lawmakers and pundits that the willingness of top officials to approve the measures would serve the Islamic Republic's interest.

News ID: ۷۴۵۹۹۵

11 September 2018

In an interview with the government-owned newspaper Iran on Monday, Heshmatollah Falahat-Pisheh, the head of Majlis National Security and Foreign Policy Commission, said the commission recently held a meeting with senior banking officials and chief executives, in which the two sides discussed different aspects of joining international bodies dealing with Anti-Money Laundering and Combating Financing of Terrorism.

According to Falahat-Pisheh, bankers demanded that  FATF-related bills be finalized as soon as possible–a request also echoed by the Economy Ministry, the Central Bank of Iran and the Foreign Ministry.

"Banks are worried that if FATF requirements are not met, they will be isolated and get disconnected from other countries," Financial Tribune quoted him as saying.

He added that although disagreement among MPs remains an issue, one outcome of the meeting was that it made bankers and MPs' views more closely aligned.

The senior lawmaker said MPs are striving to strike a balance between meeting FATF requirements and protecting national interests.

"One should not be sacrificed for the other," he said.

Asked whether the legislation will be finalized in the remaining time, Falahat-Pisheh said current circumstances reveal that "realism" about the issue is setting in and that it is possible to cooperate with FATF without endangering the country's interests.

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.

In the same month, 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 the 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 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.

Legal Commission Meeting

Hassan Norouzi, a member of the parliamentary Legal and Judicial Commission, also told ISNA that his commission will soon hold a meeting with the Expediency Council to address the council's objections to the bills on AML Amendment and joining the Palermo convention.

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

Norouzi said that in the upcoming meeting, the lawmakers will seek to clarify these objections.

While some saw the council's move as a red flag, others on Monday interpreted it as a good sign.

The website Aftabnews.ir reported that since the Expediency Council has only offered its "advice" on the issue and not passed a ruling, it was in fact signaling the Majlis to rectify the bills so that they could be passed more quickly after it convenes within two weeks.