Expert Warns of Falling Foul of FATF Standards

EghtesadOnline: Non-compliance with the requirements of the Financial Action Task Force could result in the closure of all Iranian bank accounts around the world, including individuals and embassies, an expert on international relations said, citing comments by officials in the Foreign Ministry’s Economic Department.

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19 February 2020

Mahmoud Akbari also wrote for the Iranian Diplomacy on the occasion of arriving at the final deadline set by FATF for Iran to adopt its conventions, explaining that the remaining accounts of Iranians, who have not been affected by American sanctions, are in imminent danger of being shut down, according to Financial Tribune.

"Despite the US sanctions, some countries have kept the governmental bank accounts as well as the accounts of Iranian citizens intact," but the Paris-based financial crime watchdog could ask member states to apply countermeasures if it decides to blacklist Iran in its ongoing meetings, which will culminate on Friday.

FATF is a global institution overseeing money laundering and terrorism financing worldwide. It has urged Tehran to conform to its norms by extending its deadlines several times.

Far-Reaching Impact

According to the expert, Iran's refusal to comply with international norms can impact all financial transactions, including exports and imports with friendly states.

Countries who trade with Tehran despite the US sanctions have announced that they will not be able to work with Iran if the reforms are not passed.

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 but not yet endorsed by higher authorities, namely the Guardians Council and the Expediency Council.

Akbari said, "The situation is in favor of Iran's arch-enemies, the US and Israel, which want Iran to surrender under tremendous economic pressure."

The US reneged on the 2015 nuclear deal in May 2018 and reimposed sweeping sanctions on Tehran's economy.

In October, the global organization gave Tehran until February to comply with the taskforce's provisions before it ask members to intensely scrutinize any financial dealings or financing firms located in Iran.

Akbari said the ratification of amendments will not reduce the economic pressure exerted by sanctions on Iran, but it will "at least prevent it from getting worse".

The expert pointed out that the Organization for Economic Cooperation and Development has downgraded Iran's rating in the country risk classifications from 6 to 7, the lowest ranking possible, indicating the dire economic situation.

Akbari noted that those opposed to ratifying the FATF conventions are intensifying Iran's economic woes by advocating non-compliance.

"Time is moving fast, but a last-minute reconsideration by the Expediency Council [to clear the way for] enacting the remaining two amendments can avert further economic pressure," he said.