Who is Afraid of the FATF Agreement?

On September 14, six members of the Islamic Consultative Assembly wrote a letter to President Hassan Rouhani. The topic of discussion and disagreement, as in previous days, is the agreement between Iran and the FATF, or the Financial Action Task Force, a term that has been frequently mentioned in the news lately. These six representatives have warned the President that what the government has done, namely accepting the FATF requirements and implementing them within 18 months, is beyond its authority and is related to the Islamic Consultative Assembly, and in cases where Iran's security is at stake, it pertains to the Supreme National Security Council and the Leader of the Islamic Republic of Iran. In their letter, the representatives pointed out several unacceptable aspects of the FATF requirements. First, they argue that under this agreement, Iran will no longer have a role in defining terrorist groups and must leave this definition to the United Nations Security Council and the FATF. They claim this could have repercussions for Iran; first, it could be used against Iran itself, and second, it could potentially remove resistance movements like Hamas and Hezbollah from Iran's protective umbrella. The second unacceptable issue for these representatives is that if in the future the United Nations Security Council sanctions an Iranian entity for advisory support to resistance groups, Iran would also have to sanction these entities, which would lead to significant internal challenges for the country. Previously, Ali Tayebnia, Iran's Minister of Economy, stated on Islamic Republic of Iran Broadcasting that the FATF has no list of terrorist groups and the issue it raised with Iran is that Iran has defined terrorist groups in a negative manner, meaning it is only clear which groups Iran does not consider terrorists. Reza Alijani, a political analyst residing in France, argues that this part of the FATF requirements will not create problems for Iran and will not become a critical issue. Alijani states that Iran's economic relations with some political groups that are labeled as terrorist in global discourse will continue in a non-transparent manner as before. He points to the silence of Ayatollah Khamenei and the absence of names of representatives close to security institutions in the mentioned letter, suggesting that the Islamic Republic likely wants to implement these requirements and benefit from its economic interests. Ali Tayebnia also emphasized in his interview with Islamic Republic of Iran Broadcasting that Iran can choose not to comply with some of these requirements and remain on the list of less transparent countries. But why is the Iranian government seeking to implement the FATF's demands? Iran has been a member of this anti-money laundering body since 2007, but since 2009, with the onset of sanctions against Iran due to its nuclear program, it has faced restrictions from the FATF. Now, with the implementation of the JCPOA, Iran's desire is to return to pre-sanction conditions. Ahmad Alavi, an economic expert residing in Sweden, believes that Iran specifically needs to exit the FATF blacklist to attract investment and boost its economy. However, what complicates Iran's situation are certain institutions like the IRGC, Khatam al-Anbia Headquarters, and autonomous organizations under the leadership's oversight. Beyond the political and ideological support of these institutions for certain groups in the region, they have also gained a foothold in Iran's economy, and now transparency in their economic actions has become one of the FATF's demands. Previously, government officials had repeatedly emphasized that there are no restrictions on the economic activities of such institutions within Iran, and the only limitation pertains to their foreign economic activities. Some Iranian institutions are under unilateral American sanctions, and global banks cannot engage with them. However, what have these institutions been doing until now, and to what extent will the transparency of Iran's financial transactions be affected? Ahmad Alavi states that not only the IRGC but any other institution in Iran that is suspected of financially supporting groups labeled as terrorists (according to global definitions) will be harmed by the agreement with the FATF. Alavi believes these institutions are not inclined towards transparency in Iran's economy because this non-compliance with the law, monopoly, lack of transparency, and circumvention of the law have played a significant role in the enrichment of these institutions. It is evident that joining the global banking network would be beneficial for Iran, as it would not only increase investments in Iran but also attract global banks, providing ordinary people with more options for depositing their money in banks. The verbal debate continues between the government and critics of the FATF agreement. The Minister of Economy states that Iran has neither agreed to exchange and disclose its financial information nor does it wish to change its ideological policies in defense of certain political groups. On the other hand, critics argue that accepting this agreement is self-sanctioning and entails disclosing financial information. This debate continues, and it remains to be seen what outcome the upcoming meeting between the Minister of Economy and members of the Assembly will yield for President Hassan Rouhani, who faces a significant election ahead.