As we described previously in Iran joining to FATF article, the Financial Action Task Force on money laundering (FATF) is an intergovernmental committee which monitors financial transactions and displays legal origins of funds which has illegal sources like revenue of smuggling and financing terrorism. The deadline of 18-month action plan prepared by the Financial Action Task Force for Iran ended in February 2018. Given the Iranian government’s continued efforts to finalize and pass amendments to its Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) laws, the FATF decided at its meeting this week to continue the suspension of counter-measures.
According to FATF website, Iran has been given another opportunity until October 2018 to complete its action plan by addressing nine deficiencies which are as follows:
- Adequately criminalizing terrorist financing, including by removing the exemption for designated groups “attempting to end foreign occupation, colonialism and racism”
- Identifying and freezing terrorist assets in line with the relevant United Nations Security Council resolutions
- Ensuring an adequate and enforceable customer due diligence regime
- Ensuring the full independence of the Financial Intelligence Unit and requiring the submission of STRs for attempted transactions
- Demonstrating how authorities are identifying and sanctioning unlicensed money/value transfer service providers
- Ratifying and implementing the Palermo and TF Conventions and clarifying the capability to provide mutual legal assistance
- Ensuring that financial institutions verify that wire transfers contain complete originator and beneficiary information
- Establishing a broader range of penalties for violations of the money laundering offense
- Ensuring adequate legislation and procedures to provide for confiscation of property of corresponding value.
But the FATF statement also suggested that this might be the last chance for Iran, so what happens in the next few months will be crucial for the future of Iran’s foreign ties, especially since the U.S. is set to reimpose sanctions.
In the first response to FATF statement, Economic Coordination Board which consist of President Rouhani, Judiciary Head Amoli Larijani, and Parliament Speaker Ali Larijani, passed the necessity of serious action in legal magnitude in order to not only combat money laundry and terrorism financing but also expanding international banking cooperation.
In the next four months, policy makers should focus more on challenges ahead country’s economy and financial system. After U.S. left JCPOA and reimposes unilateral sanction on Iran, several countries declared that they won’t follow U.S. in terms of setting up financial and economic constraints against Iran. Indubitably, being faithful to JCPOA by other members of P5+1 except United States requires removal of FATF counter-measures’ threat because under these conditions, risk of financial cooperation with Iran will increase.
To wrap it up, economic and banking declaration are among prerequisites of economic interactions which upgrades by means of FATF in our country. As a result of this declaration, investment and prosperity will rise in Iran.