Expediency Council Seeks Gov't Clarity on FATF Requirements

EghtesadOnline: Expediency Council, the top body in charge of settling legislative disputes, has asked the government to provide it with documents to clarify ambiguities concerning requirements mandated by the Financial Action Task Force, the global anti-money laundering watchdog.

News ID: ۷۸۶۱۶۸

05 March 2021

Mohsen Rezaei, the council's secretary, made the statement during a press conference on Wednesday.

Describing the remaining FATF bills as "tools of diplomacy", Rezaei said the government has no guarantee that even if the bills are approved, the watchdog will remove Iran from its blacklist, YJC reported.

"The fact of the matter is that if the country loses these two diplomacy tools, is there any guarantee that FATF will accept Iran as a member?" he said.

According to the official, save for two clauses, Iran has complied with all recommendations required by FATF.

In February 2020, the global anti-money laundering watchdog lifted the suspension of counter-measures on Iran and called on its members and all jurisdictions to apply effective counter-measures against the country.

One sticking point with regard to the approval of FATF bills by EC is that the task force stipulated that it would decide on "next steps" even after Iran ratifies the remaining bills.

Rezaei insisted that the phrase "next steps" must be clarified to the EC members.

By next steps, he was referring to excerpts of FATF's statements issued in the February 2020 plenary meeting by saying, "If Iran ratifies the Palermo and Terrorist Financing Conventions, in line with FATF standards, FATF will decide on next steps, including whether to suspend countermeasures."

The EC spokesman said government officials have made contradictory statements.

“They are supposed to sign and submit all the needed documents and written responses to EC members' questions. Then we can put the bills to a vote," he added.

Rezaei said the EC is awaiting documents from the government and will give the final vote to remaining FATF bills by April 20.

FATF has asked Iran to pass four bills as part of the “Action Plan” to get out of its blacklist.

President Hassan Rouhani’s administration has enacted amendments to the counter-terrorist financing and anti-money laundering rules. But the government has failed to get approval from the main legislative body for the two remaining bills, namely Palermo (convention against transnational organized crime) and terrorist financing conventions (CFT), despite the fact that the key bills were passed both by the government and parliament.

The two remaining bills were not approved by the Guardians Council, a watchdog that ensures laws are in line with Iran’s Constitution and Islamic law - and were sent to EC for a final decision. EC is a constitutional arbiter between the Majlis and the Guardians Council.

Gov't Striving to Approve Bills

The bills were left in limbo for more than a year before the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei last December approved a government request to extend the deadline for discussions on the two remaining bills.

Despite snags, the government has strived to push the bills through the powerful council. It is now optimistic that the US economic sanctions will end with a change in the White House, as the new US President Joe Biden has pledged to return to the historic Iran nuclear deal abandoned by the previous US administration in May 2018.

Senior government officials have often argued that efforts to ease sanctions would be futile unless tough financial barriers imposed as a result of an FATF blacklist are removed.

Speaking on the weekly Cabinet meeting on Wednesday, Rouhani once again asked EC members to vote in favor of FATF's remaining bills.

Recalling the financial consequences of inclusion in FATF's blacklist for the country, Rouhani asked EC to "display its power in easing the people's financial distress".

The proponents of compliance with FATF standards argue that non-compliance with FATF norms has further undermined Iran’s access to international banking and financial services.