November 10, 2017
The Financial Action Task Force (FATF), whose blacklisting of Iran is perhaps the biggest impediment to Iran being able to function normally in the international financial community, said Friday that Iran still does not comply with FATF’s rules, especially those designed to halt terrorist finances from going through Iran’s banking system.
FATF said Iran has only until January 31 to come into compliance, and indicated that it would resume “counter-measures” meant to punish Iran if it does not come into compliance by then. That would isolate Iran even more from the international financial community.
Iran and North Korea are the only countries in the world still blacklisted by FATF.
While Iran likes to blame US sanctions as the sole reason for its problems conducting international financial transactions, the fact is that FATF’s blacklisting means major international banks wouldn’t touch Iran even if the United States dropped its banking restrictions.
The Paris-based Financial Action Task Force is an intergovernmental organization founded in 1989 to develop policies to combat money laundering and terrorist financing. It now has 36 member states.
The FATF announcement Friday suggested that Iran was in compliance or close to compliance with FATF rules to combat money laundering. It did that by singling out terrorism-financing as FATF’s chief concern in Iran.
Here is the full text of the FATF announcement Friday.
“In June 2016, the FATF welcomed Iran’s high-level political commitment to address its strategic AML/CFT [Anti-Money Laundering/Combating the Financing of Terrorism] deficiencies, and its decision to seek technical assistance in the implementation of the Action Plan. In light of Iran’s demonstration of its political commitment and the relevant steps it took, the FATF decided in June 2017 to continue the suspension of counter-measures.
“The action plan expires on 31 January 2018 and the FATF urges Iran to proceed swiftly in the reform path to ensure full and accurate implementation of the Action Plan, addressing all remaining AML/CFT deficiencies, in particular those related to terrorist financing. At its February 2018 meeting, the FATF will assess progress made by Iran and take all appropriate action.
“Iran will remain on the FATF Public Statement [the blacklist] until the full Action Plan has been completed. Until Iran implements the measures required to address the deficiencies identified 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 FATF, therefore, calls on its members and urges all jurisdictions to continue to advise their financial institutions to apply enhanced due diligence to business relationships and transactions with natural and legal persons from Iran, consistent with FATF Recommendation 19.”
That recommendation states: ”Countries should consider the feasibility and utility of a system where banks and other financial institutions and intermediaries would report all domestic and international currency transactions above a fixed amount, to a national central agency with a computerized data base, available to competent authorities for use in money laundering or terrorist financing cases, subject to strict safeguards to ensure proper use of the information.” This allows Western countries to keep a close watch on Iranian transactions.
