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The Iranian regime’s dead end with the Financial Action Task Force (FATF)

Financial Action Task Force (FATF)
Financial Action Task Force (FATF)

Analysis by PMOI/MEK

 

Iran, Sept. 14, 2018 - While Iran’s October deadline to accept the Financial Action Task Force’s (FATF) Action Plan looms near, it isn’t still clear whether the Iranian regime’s parliament will be able to pass the necessary bills.

The proposal, which is part of four bills known as “Palermo bills” in Iran, have the goal of removing Iran from the FATF’s list of suspected countries.

On November 8, 2017, the administration of Iranian regime president Hassan Rouhani sent four bills to Iran’s parliament for approval, hoping to ease Iran’s economic miseries. The proposed bills are as follows:

  • The Financial Action Task Force (FATF)
  • The United Nations Convention Against Transnational Organized Crimes (UNTOC)
  • Combatting Financing Terrorism (CFT)
  • The United Nations Office of Drugs and Crimes (UNODC)

The Iranian parliament has already passed one of the four necessary bills but on September 9, in a letter to Iran’s Guardian Council (GC), Mahmoud Hashemi Shahroudi, Chairman of Iran’s Expediency Discernment Council (EDC) opposed one of the four bills.

In his letter to the GC’s chairman, Ahmad Jannati, Shahroudi argued that realizing FATFs proposed measures and guidelines in institutions like the Central Bank of Iran (CBI), the National Iranian Oil Company (NIOC), and Iran’s Central Insurance Organization (CIO), may entail perils for “Iran” in the future.

On September 5, Mahmoud Sadeghi, an Iranian MP from the so-called moderate faction, tweeted that Iran regime’s Supreme Leader had already endorsed the anti-money laundering bills.

 

 

Mahmoud Sadeghi’s tweet in defense of the bills—and a few others after the initial one—was a direct response to another letter by Shahroudi a few weeks ago. On August 26, in his letter to Iran’s GC, Shahroudi pointed out how the anti-money laundering bills disagree with Iran’s general policies. In response, the Guardian Council communicated Shahroudi’s opposition to the bill to the Iranian parliament.

A few months earlier, Shahroudi had opposed another of the Palermo bills (UNTOC), while Iran’s president, Hassan Rouhani had already declared the bills “necessary,” referring to resolutions by the “Higher Council for Economic Coordination.” The Higher Council for Economic Coordination among Branches of Government (the official name of the body) was created in May on the Supreme Leader’s orders. Its goal is to combat the country’s economic downfall and implement a policy of economic resistance.

This is just the tip of the iceberg. This internal fight between different factions of the Iranian regime about FATF has real substance.

On the one hand, if they agree to comply with FATF’s guidelines and pass the bills, Iran’s sponsorship of terrorism like funding Hezbollah and other shady state-run activities like drug trafficking by the IRGC will be at peril.

On the other hand, Iran’s economic miseries multiplied by the US’ new sanctions will only be amplified if the Palermo bills are not passed and implemented.

It is worth noting that the Basel Anti-Money Laundering Index (AML) considers Iran the highest money laundering risk among 149 surveyed countries.

FATF does not have a mandate to impose sanctions or act against blacklisted countries, but as the world’s financial watchdog its blacklist will create immense economic pressure on listed countries with the rest of the world.

FATF blacklisted the Iranian regime in 2009 but suspended its inclusion in 2016 in accordance with one of the side deals of the nuclear deal (JCPOA). The move was considered a welcoming gesture towards Iran to give it time to pave the way for joining international conventions against money laundering and financing terrorism.

 

 

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