A man walks past a Bank of Kunlun branch in Beijing, China, January 12, 2017. (REUTERS)

August 3, 2020

The chairman of the Iran-China Chamber of Commerce says Tehran has virtually no banking transactions with Russia and China. If someone with an Islamic Republic passport applies for banking services in these countries, he will be rejected.

Speaking to the state-run Iran Labor News Agency (ILNA) on August 1, Majid Reza Hariri reiterated, “No bank is willing to cooperate with us, because we are suspected of money laundering. Therefore, along with U.S. sanctions, this has doubled the pressure on us.”

Hariri admitted that in addition to U.S. banking sanctions imposed on Iran, the Islamic Republic is also struggling with restrictions set by the international watchdog, Financial Action Task Force (FATF).

Since the Islamic Republic has not fully adopted FATF recommendations, Hariri argued, the international body combating money laundering has in recent weeks “repeatedly” issued a circular to the world’s banking system, warning about the risk of dealing with Tehran, and reminding that Iran’s financial transactions should be severely controlled.

FATF announced on February 21, 2020, that it had put Iran back on its blacklist.

The decision came after more than three years of warnings from the Paris-based FATF urging Tehran to enact terrorist financing conventions.

Foreign businesses have repeatedly stressed that Iran’s compliance with FATF rules is vital if Tehran wants to attract investors, especially since the United States reimposed sanctions in 2018 after withdrawing from Tehran’s 2015 nuclear deal world powers.

Nevertheless, forces close to the Islamic Republic Supreme Leader Ali Khamenei have prevented Tehran from joining the FATF.

Iran and North Korea are the only countries still on the FATF blacklist.

To meet FATF’s demands, President Hassan Rouhani presented four bills, (collectively known as the “Palermo Bills” in Iran) to the parliament in November 2017. Nonetheless, Rouhani has so far failed to pass the bills into law.

Supporters of accepting FATF’s conditions, including Rouhani’s government, say joining the FATF and other international agreements on financial transparency and combating money laundering and terrorism-financing would reduce international pressure on Iran’s already deteriorating economy.

Commanders of the Islamic Revolution Guards Corps (IRGC), Friday Prayer Leaders across Iran, and other figures appointed by Khamenei have repeatedly opposed the passage of UN-sponsored conventions.


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.