Compliance With FATF Rules Can Improve Economic Prospects

EghtesadOnline: Implementing standards set by the global anti-money laundering watchdog can help improve Iran’s economic conditions and financial transparency, says an expert, who believes that introducing the required reforms is not a top priority for decision-making authorities.

News ID: ۷۴۸۸۰۸

26 October 2019

"Under the current circumstances, joining the FAFT can be the only way to prevent further economic problems and challenges," Ali Bigdeli also told the Iranian Diplomacy website in a recent interview.

The legislation has long been demanded by the Paris-based Financial Action Task Force, which has urged Iran to strengthen its legal framework to guard against money laundering and financing terrorism, Financial Tribune reported.

It said on Oct. 18 it had given Iran a final deadline of February 2020 to comply with international norms after which it would urge all its members to apply countermeasures, according to Reuters.

Foreign Minister Mohammad Javad Zarif called the move "a political decision", but reiterated that meeting international financial standards serves national interests.

Foreign businesses say Iran's compliance with FATF rules is crucial if Tehran wants to attract investors, especially after the United States withdrew from the 2015 nuclear deal last year and reimposed sanctions on Iran.

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

Boosting Transparency

Bigdeli, an expert on international affairs, said conformity with FATF rules can facilitate financial and banking transactions, help the country combat money laundering and improve financial transparency.

"However, certain political groups see it as being in conflict with their goals and interests," he said, adding that this division has caused "serious challenges" for the country.

Opponents argue that passing the legislation for joining FATF could hamper Iran's support for its allies, including Lebanon's Hezbollah, which the US lists as a terrorist group.

Asked about the commotion surrounding the issue, Bigdeli said it can be partly attributed to US President Donald Trump's designation of the Islamic Revolution Guards Corps as a terrorist organization.

“The White House decision increased Tehran-Washington tensions. So I believe ratifying the pending FATF bills is not as important as before [for Iranian officials] and is no longer on the agenda," he said.

FATF has conditioned taking Iran out of its blacklist on the ratification of four bills. In August 2018, Iran enacted amendments to its Counter-Terrorist Financing Act and in January 2019 amended its Anti-Money Laundering Act.

The so-called Palermo bill (International Convention Against Transnational Organized Crimes) approved by the UN General Assembly in 2000 and CFT (Convention for Combating Financing of Terrorism) have passed the Iranian Parliament.

Since the constitutional watchdog Guardians Council has repeatedly refused to approve it, the parliament has sent the bills to the Expediency Council for arbitration and awaits its final verdict.