Iran's CB Enhances Anti-Money Laundering Rules

EghtesadOnline: In line with provisions of anti-money laundering guidelines, the Central Bank of Iran has further tightened rules for daily bank transactions.

News ID: ۷۴۹۱۶۴

11 December 2019

As per the new regulations, transactions via all inter-bank systems will be limited to 1 billion rials ($7,400) per person per day, according to a notice on the CBI website.

The restrictions come into effect on December 11 (today).

Restrictions cover transactions conducted on various online payment platforms, the CBI notice emphasized without elaborating on the name of payment platforms, Financial Tribune reported.

However, the interbank information transfer network, SHETAB, launched in 2002, Checkavak, an automated clearing house system for checks, PAYA, Iran’s electronic clearing house, and SATNA, internationally known as Real Time Gross Settlement, are among online platforms that offer various payment services.

The CBI also obliged banks and credit institutions to uphold the new ceiling for all their intra-bank settlements conducted via online platforms.

Handling transactions above the set figures requires personal presence of the customer in the bank, the CBI said.

The regulator’s move is said to be in line with other anti-money laundering measures and efforts to improve “control over the money flow” in the country.

It also has tightened past restrictions governing money transfer. In a similar measure last December the CBI issued a directive ordering banks and credit institutions not to allow more than 500 million rials in daily transaction for a single debit card and up to 1 billion rials for any national ID number for transactions via point of sale devices.

In other words, each card holder was allowed to purchase up to one billion rials via POS devices with one debt card.

At that time, the CBI allowed bigger transactions to be processed by Satna and said it wanted to keep track of transactions to avert suspicious activities and abuse of the payment network.

Eye on FATF

In the run-up to the next plenary meeting of Financial Action Task Force in February 2020, it appears that the Tehran government has augmented efforts to implement AML requirements.

Back in October, the CBI in an executive bylaw made it mandatory for banks and credit institutions to create special units to deal exclusively with possible money laundering issues.

The bylaw was issued after the government ratified an amendment to the AML and Countering the Financing of Terrorism Law in the same month.

The new AML Law is a revision of previous money-laundering rules to make it compatible with new developments and circumstances.

To manage potential risks emanating from possible money laundering and terrorism funding, lenders were obliged to critically asses and identify the risks before offering financial services.

AML departments were mandated to oversee all transactions conducted in banks and report dodgy deals and violations of AML rules to the CBI (for banks and credit institutions) or other supervisory bodies, namely, Financial Intelligence Unit (for non-bank lenders).

The amended AML Law was signed by President Hassan Rouhani in early 2018, after it was studied by special bodies, namely specialized committees in the government, parliament, Guardians Council and the top arbiter, the Expediency Council.

FATF, the global anti-money laundering watchdog, issued a four-month deadline in mid-October, giving Tehran a last and final deadline to comply with international anti-money laundering rules by February 2020.

Iran has to ratify and enforce Palermo (convention against transnational organized crime) and terrorist financing conventions bills in order to escape the FATF blacklist.  The bills have been passed by the Majlis but not yet by the higher legislative institutions.