Failure to Join FATF Not in National Interest

EghtesadOnline: Iran's refusal to implement standards set by the global anti-money laundering watchdog will only play into the hands of the United States that is seeking further pretexts to build up pressure on Tehran, a political analyst said.

News ID: ۷۴۹۰۵۳

27 November 2019

"Not applying the requested reforms will assist US efforts in tightening the noose of sanctions against Iran," Mohammad Hossein Kebriya also wrote in a recent article published by the Iranian Diplomacy website.

The Paris-based Financial Action Task Force has long urged Iran to strengthen its legal framework to guard against money laundering and financing terrorism.

It announced on Oct. 18 it had given Tehran a final deadline of February 2020 to comply with international norms after which it would urge all its members to apply countermeasures, Financial Tribune reported.

Kebriya noted that meeting international financial standards could help improve Iran's situation.

"The United States has imposed sweeping sanctions on Iran, but it has failed to find a legal pretext to bring other countries, including its European allies, on board. It is now trying to find a path to form a coalition against Iran. If Tehran is brought back on to the international money-laundering blacklist, America will be able to advance its agenda more easily," he said.

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

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.

Need to Act

The expert says it is wrong to assume that there is no difference between remaining silent on the demanded reforms or rejecting them because Iran's failure to conform with FATF rules will place it on the FATF blacklist.

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 Crime) approved by the UN General Assembly in 2000 and the CFT (Convention Against Funding Terrorism) have passed the Iranian Parliament, but did not come into force as the constitutional watchdog Guardians Council has not ratified them.

The parliament sent the bills to the Expediency Council for arbitration, but the council has not issued a final verdict on the case either.

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.

"In response to critics, it should be said that FATF does not act according to America's will and its definition of terrorism and the international definition of terrorism are provided by the United Nations," Kebriya wrote.

The failure to approve the legislation will make it much more difficult for Iran to circumvent sanctions and risks losing the support of Iran's friends as well, he added.