Is FATF Compliance a Shield for the Leader or a Reality?

Cooperation with the Financial Action Task Force (FATF) remains a contentious issue within the power bloc in Iran. The Guardian Council's rejection of the Counter Financing of Terrorism (CFT) convention, one of the four FATF documents, with a proposal of 22 objections and its return to the parliament, has brought the confrontation between supporters and opponents within the ruling body of the Islamic Republic to a new stage. The country’s Friday prayer leaders, in a coordinated move similar to before the parliament's approval of the CFT, supported the Guardian Council's decision and deemed joining the FATF contrary to Islamic law and the values of the revolution and national interests. Kazem Sedighi, the interim Friday prayer leader of Tehran, went so far as to equate the acceptance of the four documents, especially the CFT, with capitulation! In response, Alireza Rahimi, a reformist member of parliament, stated: "In the new era, creating crises and leading the country to war while unleashing foreign powers is a form of capitulation for Iran." Examining the provisions of the capitulation of American advisors before the revolution against conventions that have been approved by almost all countries reveals the baselessness of this analogy. Contrary to the portrayal by the hardline faction of the Islamic Republic, supporters of joining the FATF do not see this decision as a solution to the country's banking problems but rather as a means to prevent the worsening of the situation and part of the diplomacy to contain the aggressive stance of the U.S. government. Currently, the CFT convention is under review in the Foreign Policy and National Security Commission of the parliament. The 22 objections from the Guardian Council include a series of questions regarding existing ambiguities and some objections to the provisions of the resolution, ultimately stating that, assuming the issues are irreparable, joining this convention is contrary to Islamic principles and against the national interests and security of the country. Thus, the Guardian Council has effectively closed the door to amending the parliament's resolution. Another problem arising over the FATF approval is the disagreement between the parliament's presiding board and the Expediency Discernment Council regarding how to apply the Council's oversight over the parliament's resolutions in accordance with the macro policies formulated by the Council and approved by the leadership. The interpretation of the Expediency Discernment Council, which also enjoys the support of the Guardian Council, demands adherence to the Council's opinions in the parliament's resolutions. This interpretation effectively leads to the direct participation of this body in the legislative process of the country and increasingly sidelines the parliament in the legislative process. Thus, the parliament is effectively confronted with two Guardian Councils. The parliament considers the oversight of the Expediency Discernment Council as advisory, which should send opinions to the parliament's specialized commissions for consideration by representatives. Another point of contention is the time frame for sending the Council's opinions, which the parliament insists should be limited. Currently, two documents related to FATF regarding anti-money laundering and Palermo are in a state of uncertainty due to disagreements over how to provide the Council's opinions on the implementation of macro policies. After addressing the Guardian Council's objections, the parliament was waiting for the finalization of these documents, but the Guardian Council, citing the objections of the Expediency Discernment Council, demanded further amendments. The parliament's presiding board did not accept this request, arguing that the legal deadline for the Expediency Discernment Council's opinions had expired. Additionally, Ali Larijani has called for the Council's opinion to be determined in the public session of this body, but Mohsen Rezaei, the Secretary of the Expediency Discernment Council, has entrusted the alignment of the parliament's resolutions with the higher-level documents approved by the Supreme Leader to a special working group. It seems that the parliament will address some of the Guardian Council's objections regarding the CFT at most, but it is unlikely to accept all of them, and for this reason, the Guardian Council had already deemed its objections irreparable. It was already expected that to maintain the inflexible image of the leader and the resistance of appointed institutions against engagement with the global community, the Guardian Council would reject joining the CFT. Monitoring the developments and the difficult conditions the regime is facing and the significant need for European cooperation in neutralizing extensive unilateral U.S. sanctions raises doubts that the four FATF documents will ultimately be approved, a point that Mahmoud Sadeghi, a reformist parliament member, has also confirmed, claiming that the regime's will is to resolve the mentioned bill. Javad Zarif has also stated that Iran will not become a FATF member but will only cooperate with it. There are almost three months left until the deadline set by this intergovernmental body for Iran to approve the four documents, and it is unlikely that the government will be given more time. In these three months, the situation regarding the regime's interests will become clear. A definitive rejection of these documents, which have also been approved by governments such as Lebanon and Syria, would impose a heavy cost on the Islamic Republic that is currently unbearable. Mohammad Sadr, a former senior official in Iran's Foreign Ministry, has assessed the implications of rejecting the CFT as so severe that it could lead to the regime's collapse. On the other hand, the situation is such that even their normal approval would weaken the position of the Velayat-e-Faqih institution and its supporters in the power bloc. Therefore, it should be expected that with the mediation of the senior figures in the Expediency Discernment Council, the issue will be organized in such a way that the responsibility falls on the moderate and reformist forces, so that in the future, if the consequences of the work for the Islamic Republic do not meet expectations or their necessity is eliminated, they can be blamed as conciliatory and transformed forces within the regime, and no stain remains on the leadership as a symbol of resistance against the "dominant system" and "manifestation of defending the independence and dignity of the country." It can also be expected that by adding clauses, the interpretation and definition of terrorism will be conditional on the specific considerations of the Islamic Republic. The major economic crisis and the super challenges facing the regime have left no escape route for the regime. The costs of remaining on the FATF blacklist are so heavy that the regime cannot afford them. However, the nature of the four documents, especially the Counter Financing of Terrorism convention, is such that it cannot be packaged in the wrapping of "heroic flexibility." The silence of the leadership and the mere general positioning against being absorbed into global legal and institutional structures without mentioning specifics in this regard is enlightening. He wants to maintain his image in defiance and rebellion against the existing global order, at least in appearance. The labeling of these conventions as capitulation by appointed Friday prayer leaders and their rejection by the Guardian Council and the objections raised by the Expediency Discernment Council are necessary to maintain the dual approach of Khamenei and the dominant power structure, which, in addition to discursive aspects, would impose limitations on their internal and external activities if FATF is accepted. However, this is not the end of the story, and another aspect of the leadership's approach makes the final acceptance of these conventions with not very extensive amendments and the addition of conditions that are more for domestic consumption inevitable under the leadership of the moderate forces of the regime. It seems that these oppositions, which have been accompanied by extensive propaganda, do not aim to keep Iran on the FATF blacklist but rather to prevent these policies from becoming routine so that being absorbed into the structures of international laws and relations is still considered a counter-value, and the Islamic Republic maintains its role as a protester and rebel against them. Additionally, support for Shiite and Islamic fundamentalist groups should not face effective and unavoidable restrictions.