An Economist: Lack of Financial Transparency Hinders Investment in Iran

Hassan Mansour, an economist, in an interview with the Persian section of Voice of America, identified the lack of financial transparency and the Islamic Republic's opposition to accepting international regulations on combating money laundering and terrorist financing as fundamental obstacles to investment in Iran. He emphasized that in order to attract domestic and foreign investments, essential conditions such as financial transparency, oversight of the monetary system, and prevention of the circulation of illicit funds must be established. However, in Iran, a significant portion of the government budget is opaque, and the costs of major projects are not recorded in any official reports. He pointed out that due to the lack of oversight of the country's financial system, Iran faces numerous problems in global financial transactions due to its refusal to accept international regulations against money laundering and terrorist financing. According to him, the total revenue from Iran's oil and non-oil exports is estimated to be around $100 to $110 billion annually, but a large portion of this income is not collected due to sanctions and non-acceptance of global standards, remaining blocked in foreign banks. Hassan Mansour also estimated that between 20 to 40 percent of the circulating liquidity in the country comes from illegal sources such as drug trafficking, arms smuggling, and human trafficking. This issue has caused the country's financial flow to be influenced by entities that possess not only economic power but also security, media, and logistical tools such as dedicated docks. He stated that under the current conditions, the economic and supervisory institutions of the Islamic Republic, including the Central Bank, do not have the capacity to confront these challenges, and without structural reforms, the entry of new investments into Iran's economy will be impossible. The U.S. Treasury Department announced on Friday, March 3, that the Financial Action Task Force (FATF), the global standard-setting body for combating money laundering, terrorist financing, and the proliferation of weapons of mass destruction, held a public meeting in Paris with representatives from this department. Scott Bancen, the U.S. Treasury Secretary, stated in a statement that the United States welcomes the reaffirmation of FATF's countermeasures against the Islamic Republic of Iran due to the risk of terrorist financing from this country, as well as the continued work to strengthen the international financial system against all illegal financial sources.