FATF Extends Suspension of Counter-Measures

EghtesadOnline: The Financial Action Task Force, the global anti-money laundering watchdog, decided on Friday to continue the suspension of counter-measures against Iran until October.

News ID: ۷۴۷۶۴۶

23 June 2019

In a statement published on the FATF official website, the organization extended the suspension of anti-money laundering counter-measures, allowing Iran another four months to meet international standards against money-laundering and terror financing or face more international scrutiny.

If by October Iran does not meet international norms, the FATF said it would require scrutiny of transactions with Iran and tougher external audits of financial firms operating in Iran.

Tehran has already signed into law two of the relevant anti-money laundering bills that update and amend existing legislation on terror financing and money laundering, Financial Tribune reported.

The FATF expects Iran to continue to progress with enabling regulations and other amendments.

At the conclusion of its plenary meeting this week in Orlando, Florida, the FATF noted that there are still items not completed and Iran should fully address:

(1) Adequately criminalizing terrorist financing, including by removing the exemption for designated groups “attempting to end foreign occupation, colonialism and racism”;

(2) Identifying and freezing terrorist assets in line with the relevant United Nations Security Council resolutions;

(3) Ensuring an adequate and enforceable customer due diligence regime;

(4) Clarifying that the submission of STRs for attempted TF-related transactions are covered under Iran’s legal framework;

(5) Demonstrating how authorities are identifying and sanctioning unlicensed money/value transfer service providers;

(6) Ratifying and implementing the Palermo and TF conventions and clarifying the capability to provide mutual legal assistance;

And (7) ensuring that financial institutions verify that wire transfers contain complete originator and beneficiary information.

Decision Welcome

In June 2016, the FATF welcomed Iran’s high-level political commitment to address its strategic AML/CFT deficiencies, and its decision to seek technical assistance in the implementation of the Action Plan.

Given that Iran provided that political commitment and the relevant steps it has taken, the FATF decided in February 2019 to continue the suspension of counter-measures.

In November 2017, Iran established a cash declaration regime. In August 2018, Iran enacted amendments to its Counter-Terrorist Financing Act and in January 2019, Iran has also enacted amendments to its Anti-Money Laundering Act.

Iran’s action plan expired in January 2018. While acknowledging the progress that Iran made with the passage of the Anti-Money Laundering Act, the FATF expressed its dissatisfaction that the Action Plan remains outstanding.

The FATF expects Iran to proceed swiftly in the reform path to ensure that it addresses all of the remaining items by completing and implementing the necessary AML/CFT reforms.

Iran will remain on the FATF Public Statement until the full Action Plan has been completed. Until Iran implements the measures required to address the deficiencies identified with respect to countering terrorism financing in the Action Plan, the FATF said it “will remain concerned with the terrorist financing risk emanating from Iran and the threat this poses to the international financial system.”