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Implementing AML, CTF Laws
Economy, Business And Markets

Implementing AML, CTF Laws

The deputy for supervisory affairs at the Central Bank of Iran emphasized the importance of two laws pertaining to money laundering and financing of terrorism, urging regulatory bodies to do their share in supporting and complementing it.
"Correct implementation of these laws is one of the prerequisites to re-establishing international banking relations," said Farshad Heydari in reference to the Anti-Money Laundering Law and the Law to Counter Terrorism Financing.
"It is crucial that the government remind the Majlis about the relevant laws so that it complements it the judiciary and banks execute the same efficiently," he was quoted as saying by the CBI website on Wednesday.
In March, Iran took a meaningful step toward revising its banking and financial laws and making it compatible with international norms as the Guardian Council ratified a long-pending bill to counter money laundering and financing of terrorism. The bill – drafted by the former government in 2010 – had undergone a tortuous path, as it was passed by parliament in 2011 but was rejected by the powerful Guardians.
It was sent for revision to the judiciary and was approved by the 290-member legislature. The revised bill was finally approved by the oversight Guardian Council and became a law on March 3.
The newly-appointed official who was speaking at a convention on monetary and banking affairs at the CBI, referred to the necessity of transparency and respecting the rights of all within the banking system.
"The rights of beneficiaries, namely depositors and shareholders must be made clear" in the policy and performance of banks and lending institutions.
The supervisory wing of the CBI has no desire to interfere in the day-to-day working of banks, but expects bank CEOs to perform their duties unwaveringly," Heydari told the conferees.

Rule Adherence
He also took stock of the reduction in interest rates – approved by the Money and Credit Council – and the need to uphold it. "Deposit and lending rates are determined by ground realities and the performance of different sectors within the economy", he said.
Reducing the inflation rate and creating a momentum in the economy are among the central bank's main goals, said the official.
"The CBI is now focused on extending bank credits to credible businesses, managing costs and enhancing efficiency among the banks so that depositors receive suitable returns on their savings and the rights of shareholders are protected."
Heydari, who officially took the helm of the CBI’s regulatory office a little over two months ago, stressed the importance of adhering to principles of corporate governance by banks, saying it will restrict the shareholders from unlawful interference in the business of banks. "It is incumbent on the major shareholders to exercise influence only when regulations allow and not to enter areas pertaining solely to the board of directors."
He referred to fraudulent bankruptcies as one of the problems facing the banking system, saying that big borrowers at times approach the judiciary with doctored data and file for bankruptcy.
 "This violates the rights of depositors and shareholders and it is expected that banks be more careful in their lending practices to prevent such problems in the future."
The CBI official welcomed the establishment of the Financial Crime Court, adding that in the past, lack of a specialized monetary and banking division within the judicial system was one of the big problems of banks. "It is indeed fortunate that senior judiciary officials have at last responded to the calls of the banking system."

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