“Whatever decision they make, we will follow, but they should know what consequences it would have,” he told reporters on the sidelines of a conference on Iranian foreign policy in Tehran on Sunday, ISNA reported.
The Financial Action Task Force, the international watchdog that monitors money laundering and terrorism financing worldwide, has urged Iran to comply with its standards. Otherwise, it would be blacklisted as a non-cooperative country that would severely impede the country’s international trade.
On Friday, it extended its deadline once again for another four months, but cautioned that the suspended countermeasures would next time automatically kick in if Iran failed to complete the reforms until June, according to Financial Tribune.
Some opponents of Iran’s compliance with FATF standards refused to push for a swift review of FATF reforms, hoping that the watchdog would keep extending its deadlines as the enactment of countermeasures requires the consensus of all members.
“They kept saying nothing would happen, but now they see the conditions,” Zarif said, citing FATF’s announcement that the measures would no longer be kept on hold.
Four bills were prepared by the Iranian government regarding FATF guidelines, two of which have already become law but the rest have failed to gain the unanimous approval of all decision-making bodies.
The remaining bills contain Iran’s adoption of the Palermo and CFT conventions, United Nations treaties against transnational organized crime and terrorism financing respectively.
The parliament has passed the bills, but faces the objection of Guardians Council, a watchdog that ensures laws are in line with Iran's Constitution and Islamic laws.
Having reached a deadlock, the bills were eventually referred to the Expediency Council, a powerful body that resolves disputes between the parliament and the council. They are currently undergoing review at the arbitration body.
Opponents of ratifying the two conventions argue that they would disrupt Iran’s relations with regional allies and hamper the country’s defense programs. They also maintain that the standards would hinder efforts to bypass the United States sanctions reimposed after it withdrew from the 2015 nuclear deal last year.
Harmful to Economy
Proponents, however, insist that failure to implement the FATF Action Plan would further constrain the country’s already strangled economy.
Ali Bigdeli, an international affairs expert, said in a Sunday talk with IRNA, that non-compliance with the global standards would create more obstacles to the economy, freezing the country’s international transactions.
“Our banking network would be paralyzed and monetary transactions could not be conducted … All levels of trade would be intensely scrutinized by countries such as Switzerland [whose role is crucial to Iran’s humanitarian imports],” he said.
FATF announced that if Iran does not enact the remaining legislation by June, it will require increased supervisory examination for branches and subsidiaries of international financial institutions based in Iran.
Bigdeli noted that even transfer of money for family members living outside Iran would become difficult, because the corresponding bank would block it until its origin is identified.
In the absence of compliance, FATF members would advise their banks to scrutinize all business with Iran, including obtaining information on reasons for intended transactions, stepping up controls on transactions and identifying patterns of transaction for further scrutiny.
“At present, we cannot receive money from our oil sale … Refusal to conform to the Palermo and CFT conventions would pull the plug on the already narrowed down relations we have with Europe,” he said.
The European Union has recently registered a special purpose vehicle known as INSTEX (Instrument in Support of Trade Exchanges) which aims to facilitate trade with Iran despite US sanctions. However, it has called on Iran to swiftly implement its FATF Action Plan.
Besides, as the president of the task force is from the US, “the group’s pressure will definitely be greater on us”, Bigdeli said.
Marshall Billingslea, assistant secretary of the US Treasury for terrorist financing, is currently chairing FATF.
“That is a significant indication from the FATF that time has expired, the Action Plan is overdue and we expect it to be implemented without delay,” he said after the final deadline was set.