FATF Blacklisting Bodes Ill for Banks

Lack of compliance to Financial Action Task Force regulations has impeded international banking relations, a deputy head of the Monetary and Banking Research Institute said.

“This has hurt our banks’ credit rating, therefore cooperating with them is now deemed to be highly important,” Kamran Nadri was also quoted as saying by ILNA.

He emphasized the necessity of joining FATF since foreign banks will not engage in any kind of activity with banks that do not comply with FATF regulations.

“However, the regulations of combating money laundering have been approved for Iranian banks but they did not implement them properly. As a result, many major banks in the world refuse to even transfer their funds and tensions especially rise when the source of money is Iran,” he saied.

In March 2016, the Iranian Parliament adopted an Anti-Money Laundering/Combating the Financing of Terrorism law and declared its high-level political commitment to implement the related action plan.

Iranian authorities have requested an assessment by the International Monetary Fund on Iran’s compliance with AML/CFT regime with regard to FATF standards, which will take place late 2018.

Since 2015-16, Iran has also become an observer in the Eurasian AML/CFT group following the adoption of a high-level action plan with FATF.

The intergovernmental FATF was founded in 1989 to combat money laundering, but its mandate expanded to act on terrorism financing in 2001.

The group decided in late June to keep Iran on its list of high-risk countries, but welcomed Iranian promises to improve and called for a one-year suspension of restrictions on Tehran.