Mohsen Rezaei: Three FATF Bills Contradict the Constitution and General Policies of the System

Mohsen Rezaei, the Secretary of the Expediency Discernment Council, states that the three bills related to Palermo, combating money laundering, and CFT referred to this institution have "contradictions" with the Constitution and the general policies of the Islamic Republic. A member of parliament has also mentioned that the Expediency Council has taken the "spirit of the law" regarding money laundering. Without specifying these "contradictions," Rezaei referred to the step-by-step examination of these three bills in the Expediency Council but refrained from expressing his opinion on them to avoid influencing the reviews. The bill for Iran's accession to the Convention on Combating the Financing of Terrorism (CFT), described as the "most important" bill related to the implementation of the Financial Action Task Force (FATF) regulations, is awaiting a new opinion from the Guardian Council after the parliament addressed its objections. The Islamic Consultative Assembly has also insisted on certain clauses of this law regarding its previous resolution, and the Expediency Council must express its opinion on them. Among the other three FATF bills, including the "Bill to Amend the Law on Combating the Financing of Terrorism," "Bill to Amend the Law on Combating Money Laundering," and "Palermo Bill," only the first has been approved by the Guardian Council, and the status of the others remains unclear. Rezaei stated that "in all three, there are contradictions with the Constitution or general policies." He mentioned the beginning of the review of the anti-money laundering bill on Saturday in the Council, adding that reviewing this bill is "easier since it is our internal law. The second phase will be Palermo, followed by CFT, which will be somewhat harder." He did not provide further explanation regarding the difficulty of reviewing the next two bills but stated that the Expediency Council pursues "the interests of the system and the people" in its review. According to the laws of the Islamic Republic, parliamentary resolutions must be approved by the Guardian Council, but in case of disagreement between this council and the parliament, the Expediency Council acts as the final arbiter. However, in recent years, there has been a change in this process, and a 15-member group in the Expediency Council, known as the "High Supervisory Board," reviews parliamentary resolutions with regard to the "general policies of the system." Rezaei's statements about the review of the three bills come at a time when some members of the Expediency Council predict that the bills related to the implementation of FATF regulations will be approved in this institution, while Kazem Sediqi, the Friday prayer leader of Tehran, has called for the rejection of these bills in the Expediency Council. A warning from a parliament member about the punishment of Iran by the FATF has also emerged. Mohammad Javad Fathi, a member of the Legal Commission of the parliament, states that the changes made regarding the money laundering law in the Expediency Council have taken the "spirit" of this law and destroyed its "main point." He warned that since this amendment renders other provisions of the law "meaningless," it is likely that the FATF's concerns will not be addressed, and this group may take strict decisions against Iran in the upcoming meeting in February. This representative also mentioned that with this action by the Council, the FATF could declare that it did not achieve its objectives in this new law and, based on this, raise the risk of cooperation with Iran's monetary and banking system. The FATF, on October 19, expressed regret that most of Iran's commitments remain unresolved and extended Iran's suspension from the group's blacklist for another four months, which was welcomed by Iranian officials. Meanwhile, the International Monetary Fund has advised Iran to take anti-money laundering and counter-terrorism financing measures before the FATF's February 2019 deadline. Previously, Ali Larijani, the Speaker, and some other parliament members reported that European banks and even banks from "friendly countries" have stated that the condition for cooperation with Iran is the approval of bills related to the implementation of FATF regulations. In this context, President Hassan Rouhani emphasized that if the bills related to FATF regulations are not approved, financial transactions for Iran will become 20% more expensive, stating that the costs of not approving these bills and the absence of the JCPOA should be communicated to the people, and their opinions should be sought.