Anticipation Grows for Iran Ahead of FATF Session

The Financial Action Task Force–the global body that monitors money laundering worldwide–will have Iran on top of its mind when it convenes for its forthcoming plenary and working group meetings on June 18, the Central Bank of Iran's director for international affairs announced. 

The group is expected to rule whether Iran's progress in implementing its action plan for combating any likely attempt concerning money laundering and financing of terrorism has been as promised.

"The FATF meetings will kick off on June 18 and  will last for six days in Valencia, Spain, in which the task force will measure Iran's progress in terms of adherence to Anti-Money Laundering/Combating the Financing of Terrorism in both software and hardware sectors," Hossein Yaqoubi was also quoted as saying by IRNA.

Representatives from 198 member countries, along with officials from the United Nations, International Monetary Fund and World Bank, will reportedly attend the meetings.  

The intergovernmental FATF, which is the global standard-setting body for AML/CFT, issued a public statement on February 24 and noted that in June 2016, it welcomed Iran's adoption of and high-level political commitment to an action plan to address any strategic AML/CFT deficiencies and its decision to seek technical assistance in the plan's implementation.

"This led to the suspension of countermeasures for 12 months to monitor Iran's progress in implementing the action plan, but if the FATF determines that Iran has not demonstrated sufficient progress in implementing the action plan at the end of that period, FATF’s call for counter-measures will be reimposed," the group said in its statement.  

However, the group stressed that if Iran meets its commitments under the action plan in this period, FATF will consider next steps.

A Different Outcome

Yaqoubi noted that if FATF's report concerning Iran's improvements turn out to be positive, a large number of Iran's banking restrictions and international issues will be resolved.

"An important reason of international banks' refusal to work with Iran is that we are still on FATF's blacklist and hopefully these problems will go away after the country is completely out of the non-cooperative countries' list," he added.

Hossein Qazavi, a deputy economy minister, elaborated on what Iran has done so far to conform to international standards concerning AML/CFT initiatives to be sufficient for the FATF to permanently terminate all countermeasures against the country.

“Considering the strong arguments we made, FATF would likely be persuaded to remove countermeasures against Iran permanently,” he said.

Although FATF's decisions are not legally binding, they deter other countries from engaging in transactions with the designated high-risk countries.

Qazavi noted that the only thing standing in the way of a pro-Iran stance by FATF would be “political issues and sabotage by a number of hostile countries”, hoping that no such thing would occur at the upcoming event.

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

In March 2016, the Iranian Parliament adopted a law for combating the financing of terrorism and expressed a high-level political commitment to implement the related action plan.

Iranian authorities have requested an International Monetary Fund assessment of the AML/CFT regime against the FATF standards, which will take place late 2018.

Iran has also become an observer in the Eurasian AML/CFT group.