AML Violations to Zero Out in Iran Banking Sector

EghtesadOnline: The Central Bank of Iran, in tandem with the Economy Ministry, is actively pursuing anti-money laundering measures to bring down crimes and violations in the banking system to zero in the foreseeable future, CBI's director general for regulations, banking permits and anti-money laundering said.

News ID: ۷۸۰۹۰۳

30 December 2017

Ahead of the major annual Electronic Banking Conference that is to be held in Tehran in a matter of weeks, Abdolmehdi Arjomandnejad outlined the focus of central regulator on AML efforts by employing electronic banking and technology.

"At the central bank, the Economy Ministry and the High Council of AML [affiliated with the ministry], the infrastructure for fighting money laundering has been prepared so that using the information that is transacted, any violations and frauds will be identified and dealt with by the police and the judiciary," he was quoted as saying by the Monetary and Banking Research Institute, the entity in charge of holding the annual event.

"These systems will be strengthened gradually so that in the near future and using these infrastructures, crimes and violations in the banking system would reach zero," Financial Tribune quoted him as saying.

According to the head of CBI's AML Department, all banks are obligated to send any and all information regarding monetary crimes and violations to the Financial Intelligence Unit with the Economy Ministry for follow-up measures.

Arjomandnejad said all those living or working in Iran, namely Iranian nationals or foreigners, and real or legal persons are under the purview of the Law of Anti-Money Laundering and the Law of Combating Financing of Terrorism, "but naturally, the bulk of the focus of the central bank will be directed toward monetary entities".

He also defined monetary entities as banks, credit institutions, interest-free funds, credit cooperatives, leasing companies and bureaux de changes.

"Adhering to these laws will be to their own benefit in the first place because if they do not, be it unintentionally or otherwise, they will be guilty of committing crimes and must then answer to the judiciary," he said.

Iranian officials and regulatory entities have intensified their AML/CFT efforts in the past few months as the deadline set by the Financial Action Task Force on Jan. 31 for the country to implement its commitments looms.

Last month, President Hassan Rouhani formally submitted amendments to the AML/CFT laws to the parliament and CBI published a new directive aimed at boosting current regulations.

According to Arjomandnejad, "based on several estimates conducted recently, 47% of all the money laundering in the world take place in the US while 23% happen in Europe", which means that the two constitute 70% of all money laundering violations.

The CBI official further said that because many of the money laundering offenses are conducted in "financial institutions with a significant depth and through financial instruments whose examples are seldom found in Iran", Iran's share in the global money laundering offenses is not expected to be considerable.

"However, related entities are following up the issue so that this likely meager share would also be brought down to zero," he concluded.