The political and economic crisis stemming from the inability of Iran’s regime to make decisions regarding the Financial Action Task Force (FATF) bills is a clear manifestation of its structural and managerial deadlock. The repeated postponement of reviewing these bills, which has now stretched over several years, reveals the depth of a crisis rooted in the fundamental contradictions of the regime.
The FATF is an intergovernmental organization established in 1989 by the G7 to combat money laundering and terrorism financing. Its goal is to enhance transparency in financial systems and curb illegal activities. Being placed on this organization’s blacklist, as has occurred with Iran’s regime, signifies the country’s economic isolation within the global banking and financial systems.
The FATF’s expectations of the regime’s leaders include the ratification and implementation of the Palermo and CFT conventions, aimed at combating transnational organized crime and terrorism financing. For a regime that consistently provides financial support to armed proxy groups and smuggling networks, the ratification of these bills poses an inherent threat, and the regime refuses to comply.
The Iranian regime has always faced contradictions in accepting these bills. On the one hand, the need to escape economic isolation and rejoin the global financial system makes FATF compliance unavoidable. On the other hand, ratifying these bills would impose severe restrictions on entities like the Islamic Revolutionary Guard Corps (IRGC) and diminish the regime’s capacity to support proxy groups such as Hezbollah in Lebanon and the Houthis in Yemen.
Opponents of these bills are clearly aware of the drying up of their own financial channels. In 2020, Ali Nikzad, then-deputy speaker of the Majlis (Parliament), explicitly admitted:
“If we accept FATF, it means revealing the ways we circumvent sanctions. Because we all know that we have been unjustly sanctioned by imperialism without any fault of our own. This issue has been imposed by both the Democratic and Republican parties in America against the Islamic Republic, and even the sanctions from the Democrats have been harsher on Iran.”
Uproar in the Parliament and Letter-Writing by 120 MPs
The revival of the FATF case sparked an uproar in parliament. As soon as Mohsen Dehnavi, spokesperson for the Expediency Discernment Council, announced that various aspects of the FATF bills were to be subjected to technical and expert review in the council’s committees, parliament members clashed with one another. The situation escalated to the point where Speaker Mohammad Bagher Ghalibaf had to intervene to calm the commotion, saying:
“My stance during the review of the FATF bills in the Expediency Council in the 10th Parliament was clear and transparent. We stand and have stood by our principled positions, which is both our rational and revolutionary duty, and there is no doubt about it. As the Parliament, we expressed our view during the 10th Parliament and currently have no legal role in FATF, as per the Constitution, since the matter is under the purview of the Expediency Discernment Council.”
Notably, the proposal to review the FATF bills in the Expediency Council had been made with the discretion and approval of regime Supreme Leader Ali Khamenei.
Asghar Fakhrieh Kashan, former deputy for foreign exchange at the Central Bank, also admitted that President Masoud Pezeshkian had reached an understanding with Khamenei regarding the review of FATF.
However, 120 members of the parliament were not satisfied with this opposition alone. In an explicit challenge to Khamenei, they sent a letter to cleric Sadeq Amoli Larijani, head of the Expediency Discernment Council, disputing the decision.
On the other hand, Mahmoud Vaezi, Minister of Communications and Technology in Hassan Rouhani’s administration, stated: “It is in our interest to overcome the FATF hurdle.”
Meanwhile, the reaction of Ali Shamkhani, a close advisor to Khamenei, was noteworthy. He wrote on X: “The review of the CFT and Palermo bills in the Expediency Council is an opportunity for exchanging expert opinions, not a venue for using terms like treason. Poor judgment in political actions, besides being unconstructive, only fuels political disputes and deepens divisions.”
This acknowledgment reveals that the regime’s bankrupt economy is built on circumventing sanctions, rent-seeking, extravagant spending, astronomical thefts, and opaque activities. Adopting these bills would not only deprive various factions of the regime of these tools but also pave the way for international prosecution of some of its actions.
Fundamental Contradictions and the Resulting Deadlock
This contradictory situation has driven the regime into a deadlock, intensifying a new wave of infighting and conflict among its factions.
On the other hand, delays in decision-making mean continued economic isolation, worsening the livelihood crisis for the people. This fuels explosive discontent, providing energy for uprisings and the regime’s eventual overthrow.
The clerical regime, stuck in a deadlock, now faces two difficult choices: either accept FATF, which would result in reduced financial resources for its scattered and faltering proxy forces, or continue opposing FATF, effectively engaging in what some regime figures have called “self-sanctioning,” bringing the country closer to economic collapse. This is essentially a choice between “rapid self-destruction” and “gradual self-destruction.”
This crisis, like other crises within the regime, will ultimately benefit the Iranian people, as such deadlocks further weaken the foundations of the regime. Looking ahead, only a fundamental change can resolve this situational change that will no longer come from within the regime but will be achieved by the people.