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Iran: Palermo, CFT bills no longer under review

The Combating the Financing of Terrorism (CFT)
The Combating the Financing of Terrorism (CFT)

Analysis by PMOI/MEK


Iran, May 22, 2019 - Iran’s Expediency Discernment Council says it is no longer on its agenda to review the Combating the Financing of Terrorism (CFT) bill and the Convention on Transnational Crime (Palermo bill). The approval of these bills is the two major requirements demanded by the Paris-based Financial Action Task Force (FATF) from Tehran.

Mohammad Sadr, a current Council member and a former senior adviser to Iranian regime Foreign Minister Mohammad Javad Zarif, told the Hamshahri newspaper that “the decision about the Council’s agenda is the secretariat's responsibility and the chair of the Expediency Council needs to explain the reasons why these bills were removed from the agenda.”

The regime in Iran needs to approve the CFT and Palermo bills to join the FATF body and prevent its blacklisting by the world’s de facto financial transactions transparency body.

Earlier in March, on the eve of the Persian new year, Iranian media reported the Expediency Council had postponed the review and decision about the fate of the remaining FATF bills for after the new year holidays.

Back in March, Expediency Council member Ahmad Tavakoli made these remarks about the last Council session concerning the bills: “My reading of what happened in the Council is that [the bills] won’t have enough votes.”

Gholamreza Mesbahi Moghadam, another Council member, also considered the fate of the bills in the council as virtually sealed. “The votes and the final decision of the council have been postponed to after the new year holidays,” he said.

These two bills, along with two others, have already been passed by the Iranian Majlis (parliament). However, the Guardian Council has not approved the CFT and Palermo bills, considering them in violation of the Islamic Republic’s constitution.

After much back and forth between the Majlis and Guardian Council, the issue was referred to the Expediency Council to resolve. However, as it appears, the ruling mullahcracy’s power structure is paralyzed to the level that they cannot make a final decision.

In its February meeting, the FATF decided to continue Iran’s suspension from its blacklist. However, the body provided Iran’s ruling mullahs only until coming June to fully comply with its standards, or it will “require an increased supervisory examination for branches and subsidiaries of financial institutions based in Iran.”

“If by June 2019, Iran does not enact the remaining legislation in line with FATF Standards, then the FATF will require increase supervisory examination for branches and subsidiaries of financial institutions based in Iran. The FATF also expects Iran to continue to progress with enabling regulations and other amendments,” the statement read.

“Iran will remain on the FATF Public Statement until the full Action Plan has been completed. Until Iran implements the measures to address the deficiencies identified with respect to countering terrorism-financing in the Action Plan, the FATF will remain concerned with the terrorist financing risk emanating from Iran and the threat this poses to the international financial system,” the statement continued. The FATF is advising members to “apply enhanced due diligence with respect to business relationships and transaction with natural and legal persons from Iran.”

Back in November, Mohammad Sadr warned about the possible demise of Iran’s regime in case the CFT bill is not approved.

“The opponents [of the bill] don’t understand that if the CFT is not approved, God forbid, it could pave the way for the demise of the Islamic Republic. There will be tremendous economic pressure on the people that isn’t comparable to the [Iran-Iraq] war period at all,” he said.