International Anti-Money Laundering Watchdog Warns Against Transactions with Iran and North Korea

An international anti-money laundering watchdog on Friday, February 19, urged member governments to exercise greater caution when engaging in any business and financial transactions with Iran and North Korea. According to Reuters, the Financial Action Task Force (FATF), based in Paris, expressed its 'special and extreme concern' over the ineffectiveness of Iran's financial system in implementing laws and regulations that prevent 'terrorism financing,' deeming this issue a 'serious threat to the integrity of the international financial system.' The group stated that 'the ineffectiveness of Iran's financial and monetary regulatory system in combating money laundering' would create vulnerabilities in the international financial system. Reuters noted that this warning comes at a time when nuclear sanctions against Iran were lifted last month, and on Thursday, the Central Bank and 15 other Iranian banks were reconnected to the SWIFT network. Nevertheless, the international anti-money laundering watchdog has called on member countries to pay special attention to transactions with Iran. The organization has also urged Iran to implement anti-money laundering laws and regulations to allow for the reporting of any suspicious transactions. The watchdog demanded that Iran declare terrorism financing a crime. It stated that Iran has not taken urgent action to enforce anti-money laundering laws, and if Tehran does not act by June, the organization will ask member countries to take countermeasures against Iran's shortcomings. The FATF had previously expressed its concerns in October 2007 regarding the 'lack of a comprehensive and clear structure in Iran to prevent money laundering.' The international watchdog warned that terrorist groups might exploit these weaknesses in Iran to finance their operations. The FATF had urged Iran to promptly address the 'ineffectiveness' in its financial oversight system. The organization also warned about the serious ineffectiveness of North Korea's financial system and called for special considerations regarding bilateral relations with Pyongyang. This organization is an intergovernmental body established in 1989 by seven industrialized countries, tasked with tracking money laundering and financing terrorism globally.