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How Iran’s regime stalls on meeting FATF obligations

Iran’s regime is desperately battling the FATF crisis
Iran’s regime is desperately battling the FATF crisis

Analysis by PMOI/MEK


Iran, June 19, 2019 - The Financial Action Task Force (FATF), the international body tasked with fighting global financing of terrorism and money laundering, is currently convening in Orlando, Florida, and will be deciding whether the Iranian regime is meeting its commitments toward making its financial system transparent. Tehran had been previously notified to pass the necessary laws to become conformant with the Palermo and CFT (Combatting Foreign Terrorism) bills, two necessary standards of the FATF. But since 2016, the regime has been stalling.

Failing to pass the necessary bills will put the regime on the FATF's blacklist of high-risk states. This will make Tehran subject to countermeasures to protect the international banking system and will make it much more difficult for the mullahs to finance their terrorist agendas and proxies across the globe.

Previously, Abbas Araqchi, the regime's deputy foreign minister, had predicted the passing of the CFT and Palermo bills on the European Union launching INSTEX, a financial instrument that was supposed to enable the regime to circumvent U.S. sanctions.

Iran's state-run Channel 1 television reported that in a meeting with Helga Schmid, the secretary general of European Union external action service, Araqchi threatened that if the EU does not meet its commitments under the nuclear deal forged between Iran and world powers, the regime will take retaliatory measures on its obligations, as its president Hassan Rouhani had previously declared.

"Our expectation is not only for the INSTEX to be launched, but to also include non-sanctioned goods. Otherwise, it will not meet its intended goals," Araqchi told the broadcast network.

Last week, in a parliamentary session, one of the MP from the National Security Committee lamented, "The Europeans did not meet their obligations. They gave us a package called INSTEX—they're selling us fertilizer and grains and food, which have not been sanctioned in the first place, and they're not paying us anything in return. They will not buy saffron and pistachios, they will not transfer cash… and they've set three conditions, including the dismantlement of our missiles, the stopping of our regional activities and the passing of the CFT and Palermo bills."

It is evident that, against the regime's wishes, the EU has not backed Tehran in its confrontation with the international community and did not respond to its demands on oil exports and banking transactions. Meanwhile, the regime continues to stall and deceive its counterparts under the pretext of "examining" the FATF bills.

On June 16, Fars News Agency, the media outlet of the IRGC, reported that the Joint Commission of the Expediency Council "convened for a second session to examine the possibility of the regime joining the CFT and Palermo bills."

Fars reported that the Expediency Council (EC) has submitted 11 questions to the government and will continue to hold sessions until it reaches a conclusion.

Interestingly, the EC session was taking place at the same time that the FATF was convening in Orlando to decide whether the regime has met its obligations after having been given three years' to pass the necessary bills.

The regime's Majlis has passed the bills, but the Guardian Council, an unelected body of clerics that oversees the conformance of legislation with the regime's Sharia laws, has rejected it. The EC, which is tasked with resolving disputes between the Majlis and the GC, has been stalling for months without taking concrete measures.

Ahead of the FATF meeting in Orlando, U.S. Secretary of State Mike Pompeo declared that the Iranian regime had “utterly failed to meet its commitments under the Financial Action Task Force action plan that it had agreed to.” Germany, Britain, and France made similar calls in a joint statement in January, in which they urged Tehran “to swiftly implement all elements of its FATF action plan.”

The FATF bills are meant to keep global markets safe. But clearly, the regime is wasting time by ball-handling the bills between its many different organizations, trying to create the impression that it is working toward resolving the issue while not taking action. What's for sure is that any international standard that makes the regime's financial system more transparent and subject to oversight will be a blow to the mullahs' machinery of financing their illicit activities, circumventing global sanctions, funding terror groups and the likes of the brutal Assad regime in Syria.

Hossein Mozaffar, a member of the Expediency Council, made it clear that it is not in the regime's interests to become conformant with FATF standards on the same day that Pompeo made his statements about Tehran's failure to meet its commitments. “The kind of transparency that FATF seeks … is to find out our ways for bypassing sanctions,” Mozaffar said. “For a country under sanctions, it is a very unwise move to show our hands and let them see and block all our strategies.”