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Global watchdog gives Iran till June to comply with anti-money laundering rules

February 23, 2019 at 11:55 am

Iranians hold an Iranian flag during a protest in Tehran, Iran on January 05, 2018 [Fatemeh Bahrami / Anadolu Agency]

Iran has until June to fix its anti-money laundering and terrorism financing rules or face increased international scrutiny of its banks, a global watchdog said on Friday.

Foreign businesses say Iran’s compliance with Financial Action Task Force (FATF) rules is key if it wants to attract investors, especially after the United States re-imposed sanctions on Iran last year.

France, Britain and Germany have tied Iran’s compliance and removal from the FATF blacklist to a new channel for non-dollar trade with Iran designed to avert US sanctions.

Last October the Paris-based FATF gave Iran until February to complete reforms that would bring it into line with global norms, or face consequences. But at a meeting this week the watchdog concluded that Iran had not done so.

Marshall Billingslea, US assistant Treasury Secretary for terrorist financing, who chaired the FATF meeting, said Iran had until June before countermeasures would automatically kick in.

“That is a significant indication from the FATF that time has expired, the action plan is overdue and we expect it to be implemented without delay,” Billingslea told journalists.

Read: EU starts scheme to bypass US sanctions on Iran

FATF members worldwide would be required to step up supervision of Iranian bank branches on their territory, including on-site inspections, Billinglsea said.

In the absence of compliance, the FATF called on its members to advise their banks to scrutinise all business with Iran, including obtaining information on reasons for intended transactions, stepping up controls on transactions and identifying patterns of transaction for further scrutiny.

Iran’s central bank welcomed the deadline extension granted by the FATF and called in a statement for the “remaining bills to be approved as soon as possible”, the Iranian state news agency IRNA reported.

The government of President Hassan Rouhani and his supporters in parliament have been trying to secure the adoption of four bills to bring Iran into compliance with FATF regulations.

Two of the bills have been approved but the process has been slowed by hardliners who oppose passing such legislation, arguing it could hamper Tehran’s financial support for allies such as Lebanon’s Hezbollah, which the United States lists as a terrorist organisation.

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