Financial Action Task Force Gives Iran Three Months to Reform Its Laws

The Financial Action Task Force (FATF), which combats money laundering globally, announced on Friday, July 8, that Iran has until this autumn to implement reforms that align with international norms and regulations in this area. Otherwise, it will face consequences, including the withdrawal of investors from the country. Tehran has been trying to attract foreign investors since the 2015 nuclear agreement with world powers, which lifted sanctions against its nuclear program. The government of Hassan Rouhani has sought to implement FATF regulations, which combat state money laundering and terrorism financing, to remove Iran from the blacklist that deters foreign investors from cooperating with it. In its statement, which was reported by Reuters on Saturday, FATF expressed disappointment over Iran's failure to implement a program that would address its weaknesses in combating state money laundering and terrorism financing. The statement added, 'FATF expects Iran to immediately pursue the path of reforms to ensure that all remaining issues in this program are addressed... We expect Iran to approve amendments related to combating state money laundering and terrorism financing in its laws by October 2018 in a manner that fully complies with FATF standards. Otherwise, FATF will take appropriate decisions and necessary actions.' The Rouhani government is pursuing four bills to 'join the Convention on Organized Crime,' 'join the Convention on Terrorism Financing,' 'amend the Anti-Money Laundering Law,' and 'amend the Terrorism Financing Law' to avoid being placed on FATF's blacklist. However, the recent stance of Ali Khamenei, the Supreme Leader of the Islamic Republic, against Iran's accession to the Convention on Combating Terrorism Financing has complicated matters. Ayatollah Khamenei called for the abandonment of these bills on the last day of Khordad and requested that the Iranian Parliament independently establish its own laws regarding money laundering and terrorism financing. However, a member of the Iranian Parliament's presiding board has reported that Hassan Rouhani and Ali Larijani, the Speaker of the Iranian Parliament, are scheduled to meet with Khamenei regarding this issue. The FATF was established in 1989 and monitors international anti-money laundering and anti-terrorism financing standards. In July 2016, due to Iran's commitment to implementing these measures and taking necessary steps, the FATF decided to keep Iran on the blacklist while suspending punitive measures against it. One of the reasons opponents of joining the Convention on Combating Terrorism Financing in Iran cite is the blockage of financial assistance to 'Hamas' and 'Hezbollah,' two groups that the U.S. and several other countries consider 'terrorist.'