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Iran Firm on Quitting FATF Blacklist

Iran has been actively fighting money laundering and terrorism financing
Iran is still considered a Non-Cooperative Country or Territory in the eyes of the FATF. Iran is still considered a Non-Cooperative Country or Territory in the eyes of the FATF.
Iranian policymakers believe that instead of putting soldiers at risk on the ground, it is better to cut off the financial means used in money laundering and terrorism

Iran is determined to quit the blacklist of high-risk countries of the Financial Action Task Force, according to the deputy economy minister for banking and insurance who blamed the country's unfavorable status on politics.

"Policymakers in our country believe that instead of putting soldiers at risk on the ground, it is better to cut off the financial means used in money laundering and terrorism," Hossein Qazavi was also quoted as saying be IBENA.

Qazavi noted that Iran has been actively fighting money laundering and terrorism financing, and considering the regulations that have been put in place to advance this, "logically, such a country must not be put next to countries such as Afghanistan, Pakistan or even Iraq and Syria".

The intergovernmental FATF, which monitors money laundering and terrorism financing worldwide, decided in late June to keep Iran on its blacklist of high-risk countries, but welcomed Iranian promises to improve and "suspended counter-measures for 12 months in order to monitor Iran’s progress in implementing the Action Plan”.  

Noting that Iran is still considered a Non-Cooperative Country or Territory in the eyes of the organization, Qazavi said "political factors" are the main reason for the designation. 

Countries at odds with Iran have surely tried to make sure that it stays on the list, "but it is necessary that with the same firm language, we would inform them about our anti-money laundering and counter-terrorism financing infrastructures".

As the deputy economy minister pointed out, being on the NCCT list means Iran is only able to engage in business transactions with a limited number of small banks in few countries that "demand exorbitant costs to cover their risks, which will directly impact exports and imports".

Qazavi further said FATF always strives to identify suitable infrastructures to combat money laundering and terrorism financing. 

"The Iranian side must come up with evidence showing that if someone tries to wire an amount of cash in the country, the bank will identify the source and not just hand the individual's information to another international entity," he said.

"Within our banking system, it must be determined who is sending the funds and if there are any doubts that the money might be used in laundering or for malicious activities, the banking system must have the procedures in place to report the dubious activities to a higher organization in the country for analysis."

Economy Ministry Hails FATF Link

The Ministry of Economy has published a report on the country's interactions with the task force, calling the suspension of restrictions one of the two "landmark" events for the Iranian economy during the four-year tenure of the current government led by President Hassan Rouhani.

The report points to the backlash from mainly hardliners asserting that Iran's FATF cooperation would lead to the disclosure of the country's financial and banking secrets. 

These criticisms were "fully addressed by the government", it said. 

In reference to the economic achievements of Iran's continued cooperation with the international task force, the ministry said despite the media hype and criticism, "for one year, the country's banks can engage in transactions with global banks and end their long isolation ".

Considering the current growth rate of the economy (predicted to be around 7% for the whole fiscal year), the report says cooperation with FATF can act as a springboard for attracting foreign investment to Iran and having a stronger presence in the international banking system.

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