Refusal to Join FATF Would Help Forge Int'l Front Against Iran

EghtesadOnline: Failure to ratify laws demanded by the global anti-money laundering watchdog will adversely affect Iran's economy, as it will help forge an international front against the country in the economic field, a political analyst says.

News ID: ۷۴۹۲۶۷

23 December 2019

"North Korea is currently on the FATF blacklist and Iran's addition to the list as the second country would result in the formation of an international consensus against it when it comes to economic activities," Mehdi Motahharnia also told ISNA in a recent interview.

The Paris-based Financial Action Task Force has for years demanded that Iran adopt anti-money laundering and anti-corruption transparency laws, and reform its banking system to be allowed full access to the world banking system.

Iran is currently on FATF's watch list and has received a final deadline of February 2020, the failure to observe which will put the country on an international black list, according to Financial Tribune.

"FATF members include economic superpowers and emerging economic powers that represent 85% of the global economy. So, inclusion in such a blacklist could pose a serious threat to Iran's economy and negatively affect investment prospects," the expert said.

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

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 the CFT (Convention Against Funding Terrorism) have passed the Iranian Parliament, but are not yet in 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.

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.

'Persistent Challenge'

Motahharnia, a university professor, said the question of introducing the required reforms has become a "persistent challenge" in Iran.

He said critics of FATF-related bills are more against the benefits that structural reforms can provide for certain groups in Iran and have "turned a national project into a political one".

"The question is why some people who consider themselves flag-bearers of promoting transparency, abiding by Islamic law and obeying the law are opposed [to Iran joining the FATF]," he added.

Motahharnia also dismissed as baseless concerns the country's financial transactions being tracked after adopting the required laws.

"Today, superpowers can easily track financial transactions with the means they have at their disposal," he concluded.