The deadline extension granted by the global anti-money laundering watchdog is an “opportunity” to make amendments that could help lessen the impact of sanctions and facilitate Iran’s economic engagement with the outside world, a former diplomat said.
“The FATF deadline extension is an opportunity if used to [introduce the required reforms]. However, if we decide to keep dragging our feet and do not ratify the related bills, we may not only remain on the blacklist, but could also face punishment,” Nosratollah Tajik told ISNA in a recent interview.
In February, the Financial Action Task Force gave Iran until June to fix its anti-money laundering and terrorism financing rules or face increased international scrutiny of its banks, Reuters reported.
Foreign businesses say Iran’s compliance with FATF rules is crucial if it wants to attract investors, especially after the United States reimposed sanctions on Iran last year after pulling out of the 2015 nuclear deal between Tehran and world powers.
Tajik, an expert on political affairs, said by meeting the demands set by the Paris-based organization, Iran could take away any further excuse from the US administration to heap pressure.
"It will also help the country benefit from the European financial mechanism designed to avert US sanctions," he added, referring to the fact that France, Britain and Germany have tied Iran’s compliance and removal from the FATF blacklist to a new mechanism for non-dollar trade.
Factional Issue
The issue of FATF is no longer an expert issue and has become a political, and, worse than that, a factional issue that is being used by each side to criticize and vilify the other, the expert added.
The administration of President Hassan Rouhani and his supporters in parliament have been trying to secure the adoption of four bills to bring Iran into compliance with FATF regulations.
Two of the bills have been approved but the process has been slowed by those who oppose the legislation, arguing that it could hamper Tehran’s financial support for allies such as Lebanon’s Hezbollah, which America lists as a terrorist organization.
Tajik, who is also a former envoy to Jordan, said completing reforms to make Iran comply with global norms is in the country's interest, as it could help improve people’s welfare and livelihood, make them more satisfied and remove national security threats.
The expert maintains that flawed economic policies over the past years have made the country “vulnerable”, which runs contrary to its efforts for undertaking constructive engagement with the world and ending social, political and economic isolation.
“Our economy has suffered setbacks in these years, and instead of being bolstered by the activities of NGOs and the private sector and tax revenues, a large part of administrative affairs is dependent on oil money,” he said, adding that reducing oil reliance can help make the Islamic Republic prosper.
"In addition, there is a need to downsize the government to streamline different procedures and make them more efficient," Tajik said.
