Some of demands by the Financial Action Task Force (FATF), the global anti-money laundering watchdog, have been implemented, a senior official said Wednesday.
The Expediency Council (EC) is again reviewing the Palermo (United Nations Convention Against Transnational Organized Crime) and CFT (Combating the Financing of Terrorism) Conventions, the head of the Economy Ministry’s Financial Intelligence Unit (FIU) said.
“We are trying to improve the transparency of financial transactions to eliminate hurdles that our economic entities are grappling with” Hadi Khani was quoted by IBENA as saying.
With the Expediency Council ratifying the Palermo Convention and CFT, the conditions will be created for Iran’s exit from the FATF blacklist, Khani said.
“Today we are ahead of some member states of the FATF in collaborating with that body in combating money laundering and financing terrorism,” the deputy economy minister said without elaboration.
FATF has called on Tehran to pass four bills as part of the “Action Plan” to get out of its blacklist. The former government approved and enacted amendments to Iran’s counter-terrorist financing and anti-money laundering rules.
However, it failed to get approval from the Guardian Council for the two critical bills, namely Palermo (convention against transnational organized crime) and terrorist financing conventions (CFT), despite the fact that the bills were passed by the government and parliament.
The Guardian Council vets laws to ensure they are in line with the Islamic Republic Constitution and the Sharia. EC is a constitutional arbiter between the Majlis and the Guardian Council.
Exercise in Futility
Senior Iranian officials have concurred that the concerted efforts to ease the US economic sanctions would be futile unless the tough restrictions on international banking due to the FATF blacklist are removed.
Opponents of compliance with FATF norms claim it will expose Iran’s key economic and financial data to hostile powers like the United States. Economists and most independent experts reject the concerns as unwanted and unwarranted.
Proponents of compliance with FATF standards argue that non-compliance has cut off Iran’s much-needed access to foreign investment and international banking/financial services.
In its latest press statement, the FATF said that Iran will remain on the blacklist until the full Action Plan has been completed.
If and when Iran ratifies the Palermo and Terrorist Financing Conventions, in line with the FATF principles, the FATF will decide on the next steps, including whether to suspend the countermeasures.
“Until Iran implements the measures required to address the deficiencies identified with respect to countering terrorism-financing in the Action Plan, the FATF will remain concerned with the terrorist financing risk emanating from Iran and the threat this poses to the international financial system," the international body said on its website on Oct 21.
Parallel Measures
Khani elaborated on measures undertaken to build AML ties with friendly countries, saying that Tehran seeks close ties with nations in fighting terrorism funding in the region and benefit from their knowledge and expertise.
Government officials discussed such issues with members of the Eurasian Group on Combating Money Laundering and Financing of Terrorism on the sidelines of the group's recent meeting in Dushanbe, Tajikistan.
A MoU was signed to this effect by the FIU head and Uzbekistan’s Department on Combating Economic Crime.
Established in 2008, the FIU is affiliated to the Iran High Council on Anti-Money Laundering and headed by the economy minister.
Iranian officials also met with Tajikistan's finance minister and the two sides expressed interest in boosting collaboration in implementing AML/CFT measures.
Khani called on Yury Chihanchin, director of the EAG Federal Financial Monitoring Service, on the sidelines of the EAG Plenary Week. The two men stressed the need for implementing stringent AML/CFT measures with a focus on curbing drug trafficking.
Chihanchin, who also is chairman of EAG, welcomed Iran’s efforts in combating financing terrorism and money laundering saying that the EAG would submit a report on Iran's moves to the Financial Action Task Force (FATF).
"The FIU has already signed deals with 15 countries and is set to sign MoUs with Turkey and India over AML/CFT," Khani said.
