PARIS – The world’s financial watchdog has extended a waiver for punitivemeasures against Iran for another six months but refused to remove thecountry from its blacklist.
The Paris-based the Financial Action Task Force (FATF) had been weighingTehran’s request for the lifting of so-called countermeasures for some timebut a flurry of recent visits by a top US official to France and otherEuropean countries thwarted the bid.
Change of heart
Iran’s removal from the blacklist had gained support in European capitalsin recognition of the steps Tehran has taken in recent years to enactlegislation barring terrorist financing and money laundering.
However, the US sent the official to France, Germany, the Netherlands andBelgium ahead of a plenary meeting of the task force Friday to warn thatkeeping Iran on the FATF blacklist was a top priority, and that Washingtonwould aggressively pursue that policy.
As a result, the FATF decided to continue the suspension ofcountermeasures, taking into account the fact that Iran has draftlegislation currently before Parliament, but did not remove the countryfrom the list in a decision which many believe is political.
The FATF suspended its punitive measures for a year in 2016 when Iranreached a landmark nuclear deal and promised to step up its fight onmoney-laundering. The task force extended the waiver last July and again onFriday.
The Iranian government hopes that the exit from the FATF blacklist wouldremove one hurdle to foreign investment. Critics of the government,however, say membership in the Financial Action Task Force has not onlyfailed to attract investment, but it has also exposed various institutionsto extraterritorial regulations and penalties.The week-long meeting of the Financial Action Task Force (FATF) began inParis on Feb. 18, 2018.
Iranian institutions targeted
In its Friday decision, the FATF threatened Iran with new penalties in Juneif it doesn’t bolster oversight of alleged terrorism financing and moneylaundering within its borders.
Some in Iran believe the US is using the FATF to target key organizationssuch as the Islamic Revolution Guards Corps (IRGC) which has both a role inthe Iranian economy and supports groups such as Lebanon’s Hezbollahregarded as legitimate “resistance” entities by the Islamic Republic.
The FATF cited ninelink>“actionitems” which Iran had to fully address before the body considers its bidfor removal from the blacklist.
“Until Iran implements the measures required to address the deficienciesidentified in the Action Plan, the FATF will remain concerned with theterrorist financing risk emanating from Iran and the threat this poses tothe international financial system,” it said.
“The FATF, therefore, calls on its members and urges all jurisdictions tocontinue to advise their financial institutions to apply enhanced duediligence to business relationships and transactions with natural and legalpersons from Iran, consistent with FATF Recommendation 19,” it added.
Countries that do not follow FATF are often labeled as high-risk oruncooperative jurisdictions by the West, making international trade costlyand difficult.