The Financial Action Task Force, which is in charge of monitoring money laundering and other financial malpractices worldwide, should take into account Iran’s exhaustive lawmaking process before placing it back on a blacklist, a parliamentarian said.
The government has prepared four bills to bring the country into line with the FATF standards.
The ones that contain articles on the global norms of countering the financing of terrorism and transnational organized crime are yet to receive the final approval.
FATF had set a deadline of October last year for Iran to complete the legal reforms to bring itself in line with its guidelines, which it later extended until February.
Otherwise, it would be returned to the blacklist of non-compliant countries that makes foreign investors and banks reluctant to deal with it.
Pointing to the looming deadline, Alaeddin Boroujerdi, a member of Majlis National Security and Foreign Policy Commission, said the amendments are undergoing a review that, like other countries, is a lengthy procedure.
“This special financial group should acknowledge this process with well-considered judgment and avoid placing Iran on the backlist after the deadline’s expiration,” he said, in a recent talk with ICANA.
FATF has given Iran until this month to complete legal reforms to bring itself in line with the standards set by the international body that monitors financial malpractices
As per the regulations, government bills are submitted to the parliament to be reviewed and passed by lawmakers, but do not become law until they get the approval of Guardians Council, the watchdog that endorses or rejects legislation based on conformity with the Iranian Constitution and Islamic law.
Cases that hit a snag are referred to the Expediency Council, a state body that resolves disputes between the parliament and Guardians Council.
FATF-related bills are presently with the arbitration body that has not been able to settle their differences and reach a consensus despite the deadline’s approach.
Boroujerdi called on the international organization to wait for the final decision of the Expediency Council.
Imposed Condition
The European Union’s financial mechanism to facilitate trade with Iran, in the face of American sanctions, has been conditioned on Iran undertaking legal modifications.
France, Germany and the United Kingdom announced on Thursday the registration of the special purpose vehicle for trade with Iran, formally called INSTEX (Instrument in Support of Trade Exchanges).
This was a pledged move in accordance with the EU’s commitment to save the 2015 nuclear accord from which the United States withdrew last year.
Yet, their statement has called on Iran to “swiftly implement all elements of its FATF action plan” since the system will function “under the highest international standards with regard to anti-money laundering, combating the financing of terrorism.”
Boroujerdi censured the act of using the reforms as a condition for the implementation of INSTEX.
“The financial channel’s launch does not affect the opinion of the [Expediency] council members; they make a decision based on national interests and the country’s good,” he said, adding that the international community should wait for the laws to undergo due process.
He added that although it is very important for the government to have the bills approved before the expiration of FATF’s deadline, it is also essential to ensure “Iran can benefit from the bills’ legal, economic, political and financial advantages”.
President Hassan Rouhani’s Cabinet has been pushing for the approval of the measures, maintaining that they would facilitate Iran’s international banking and financial transactions.
They also argue that the laws will pave the way for efforts to rescue the nuclear deal, a cherished signature achievement of Rouhani’s administration.
Opponents, however, are concerned that the laws might negatively affect the country’s relations with regional allies as well as its defense programs.
