Hardliners in Iran staging a protest against international financial watchdog FATF demanding legal reforms. September 30, 2018. (IRNA)

October 14, 2019

A pro-reform lawmaker in Iran says should the bills related to combating money laundering not ratified, almost the whole world would stop dealing with Iran.

“Under U.S. sanctions imposed on Iran, the Chinese companies have already stopped dealing with us,” Abdolreza Hashemzai told Borna news agency, noting, “Even friendly countries, such as Russia and China will stop dealing with Iran if the Palermo bills are not passed by Expediency Council (EC).”

President Hassan Rouhani presented draft laws to meet the Financial Action Task Force (FATF) demands to parliament in November 2017. Supporters of the legislation, known collectively as the Palermo Bills, say joining the FATF and other international agreements on financial transparency, money laundering, and combatting international terrorism would reduce international pressure on Iran’s already deteriorating economy.

Iran has been trying for more than a year to convince European powers to buy oil and allow trade despite U.S. sanctions. Without approving FATF-mandated legal and financial reforms, Iran will have problems securing any European economic cooperation.

For several months the issue of financial reform bills were not mentioned in Iran as tensions with the United States escalated. It is not clear why the issue has again surfaced, or if this is a sign that Tehran wants to formally adopt the reforms.

The bills would also pave the way for Iran to join the United Nations Convention Against Transnational Organized Crime (UNTOC), Combatting the Financing of Terrorism (CFT), and the United Nations Office of Drugs and Crimes.

Iran and North Korea are the only countries in the world that have refused to accept FATF standards, so far.

Nevertheless, the Islamic Republic Expediency Council (EC), a body packed by hardliners, has hesitated to ratify the bills, so far.

“If the EC is really worried about people’s hardship, and does not enforce its political tendencies, it should immediately endorse the proposed bills,” Hashemzai maintained.

Meanwhile, in a controversial remark, another lawmaker Heshmatollah Falahatpisheh, has claimed that the Palermo bills have already passed as a law, since the Expediency Council’s deadline to endorse the proposals ended on October 10.”

The EC secretariat has not yet reacted to Falahatpisheh’s comment.

For the fifth time in a row, Paris-based FATF on June 21 in Orlando, Florida, set a new deadline for Tehran to join the international convention.

The financial watchdog warned that “if by end of December 2019, Iran does not enact the Palermo and Terrorist Financing Conventions in line with the FATF Standards, then the FATF will require introducing enhanced relevant reporting mechanisms or systematic reporting of financial transactions; and increased external audit requirements for financial groups with respect to any of their branches and subsidiaries located in Iran.”

U.S. Secretary of State Mike Pompeo has also said that if Iran were serious about fighting money laundering and financing terrorists, it would have approved laws to make the country in par with international standards.

Pompeo last Friday tweeted, “If #Iran were serious about combatting terror and adhering to global anti-money laundering and terrorism financing standards…, it would ratify the #PalermoConvention and the Terrorist Financing Convention immediately.”

RFE/RL

About Track Persia

Track PersiaTrack Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.