Zarif: FATF Ultimatum Serves Political Purposes

EghtesadOnline: Iran's top diplomat said the Financial Action Task Force's imposition of a final deadline on Iran is a "completely political" decision, but stressed that international financial standards need to be met for the sake of national interests.

News ID: ۷۴۸۷۷۹

22 October 2019

Speaking on the sidelines of the Conference on Unilateralism and International Law in Tehran on Monday, Foreign Minister Mohammad Javad Zarif told reporters that Iran has already pursued an anti-money laundering agenda as a necessity in its domestic laws.

"FATF's decision is completely political and we strongly object to it, but we took all necessary measures to [comply with global standards to] counter money-laundering and terrorist financing to serve our own national interests," Zarif was quoted as saying by ISNA.

FATF is a global institution overseeing money laundering and terrorism financing worldwide. It has urged Tehran to conform to its norms, giving it deadlines but extending them several times, Financial Tribune reported.

On Friday, however, it issued an ultimatum that noncompliance by February 2020 will lead to countermeasures from all member states.

The Paris-based task force said that it was asking members to demand scrutiny of transactions with Iran and tougher external auditing of financing firms operating in the country, Reuters reported.

Pending Bills

Amendments to its Counter-Terrorist Financing and Anti-Money Laundering acts have already been enacted in Iran, but the bills to ratify the Palermo (Convention against Transnational Organized Crime) and Terrorist Financing conventions have been passed by the parliament and not yet verified by the higher authorities.

FATF said in its statement that "if before February 2020, Iran does not enact the Palermo and Terrorist Financing Conventions in line with the FATF standards, then FATF will fully lift the suspension of countermeasures and call on its members and urge all jurisdictions to apply effective countermeasures."

"I hope an internal consensus will be reached and the follow-up steps will be taken not to give a pretext to those who do not support Iran's interests and are against us," Zarif said.

A member of Majlis National Security and Foreign Policy Commission also said Iran's response to FATF requirements has been reasonable and it should not have acted so strictly.

"This indicates that a powerful and hardline political atmosphere has been formed against Iran in FATF, which tries to threaten the country," Heshmatollah Falahatpisheh also told ISNA.

Foreign businesses say Iran's compliance with FATF rules is crucial, if Tehran wants to attract investors, especially after the United States reimposed sanctions on Iran last year.

France, Britain and Germany have tied Iran's removal from the FATF blacklist to a new channel for non-dollar trade with Iran designed to avert US sanctions.

Iranian officials are, however, divided over complying with FATF. Supporters say it could ease foreign trade with Europe and Asia when the country's economy is targeted by US penalties, while opponents argue that passing legislation toward joining the FATF could hamper Iran's support for its allies.

Foreign Ministry Spokesman Abbas Mousavi said during a press conference on Monday that the issue of FATF has not been well comprehended domestically, despite efforts by this ministry and other relevant bodies.

"Contrary to what some groups say that joining FATF is self-sanctioning, we say that not joining it is self-sanctioning and self-restriction," he was quoted as saying by IRNA.