Iran's AML/CFT Forex Regulations Tightened

EghtesadOnline: The Central Bank of Iran has amended its executive directive for regulations overseeing foreign exchange, banking instruments and bonds carried by travelling individuals in line with better adherence to international regulations on anti-money laundering and combating financing of terrorism.

News ID: ۷۸۰۳۶۳

11 November 2017

The measures are announced days after the Financial Action Task Force, the intergovernmental body in charge of devising AML/CFT regulations, urged Iran on Friday to fully implement is commitments in its Action Plan by Jan. 31, 2018.

CBI's original directive issued almost one year ago mainly decreed that individuals entering or exiting the country, who possess more than €10,000 in foreign currency, banking instruments or bonds, will be subject to an official probe to decide the origin of the assets.

Holding more than the aforementioned amount or its equivalent in other currencies would only be possible if the holder would: a) obtain a bank receipt or any other document indicating that the amount has been reimbursed by a bank, b) an authorized receipt from an exchange house registered in CBI's SANA system or c) a printed receipt containing the tracking code that indicates the currency was declared when entering the country, Financial Tribune reported.

Drivers and truckers working in international transit, pilots, ship captains and their crew are also subject to the directive.

The original directive noted that keeping foreign exchange, banking instruments and bonds worth up to €10,000 or its equivalent in other currencies faces no legal barriers.

In its amended form, however, the directive contains an article asserting that "if related officials suspect money laundering, terrorism financing or other crimes for sums lower than €10,000 or its equivalent in other currencies, the same due diligence process will be employed".

The amendment has been put in place "for implementing anti-money laundering and combating financing of terrorism rules and regulations", as reported on the official website of the central bank.

Details of the Directive

In case of bringing in foreign currency and/or banking instruments, including bank checks, guarantee checks, travel checks and other transferable financial instruments plus bonds, after the holder has declared them and received a tracking code, the Islamic Republic of Iran Customs Administration would refer the information to a Bank Melli Iran system and direct the traveler to a branch.

After receiving and registering the information, BMI will give its confirmation to IRICA, which will file an inquiry with the Financial Intelligence Unit affiliated to the Ministry of Economic and Finance Affairs, during which time BMI will safeguard the funds.

In case of a confirmation by FIU, the holder or their legal representative will be able to bring the foreign exchange into the country by receiving the actual amount or selling it in another currency at market rates. If the sum is in the form of banking instruments or bonds, they will be fully restored.

When a traveler wishes to send foreign currency, banking instruments or bonds outside the country, they themselves–and not their legal representative–must get a receipt containing a tracking code from BMI and IRICA and declare the sum.

"If the source of the foreign currency, banking instruments and anonymous bonds is not confirmed, FIU will inform the customs administration and register a complaint with the judiciary," the CBI directive reads.

FIU will inform IRICA and BMI, should the judiciary not issue a certain validation, during which time BMI will hold the asset.

If the judiciary delivers a guilty verdict, the sums will find their way to CBI's Office for Banknote Issuance and Treasury that will purchase the confiscated foreign currency at open market rates and wire the rial equivalent to the account determined by the country's Treasury.

The central bank has also included an article in its directive, saying "bringing in and taking out foreign currency, banking instruments and bonds by mailing and shipping higher than €10,000 or its equivalent in other currencies is prohibited".