the anti-money laundering body, the Financial Action Task Force announced on Friday that it has extended the suspension of countermeasures against Iran for another four months, recognizing the country’s efforts in meeting its Action Plan. “The FATF decided at its meeting this week to continue the suspension of counter-measures. While welcoming the passage of the […]
the anti-money laundering body, the Financial Action Task Force announced on Friday that it has extended the suspension of countermeasures against Iran for another four months, recognizing the country’s efforts in meeting its Action Plan.
“The FATF decided at its meeting this week to continue the suspension of counter-measures. While welcoming the passage of the Anti-Money Laundering Act, the FATF expresses its disappointment that the Action Plan remains outstanding and expects Iran to proceed swiftly in the reform path to ensure that it addresses all of the remaining items by completing and implementing the necessary AML/CFT reforms,” the FATF said in a statement at the end of its Plenary meeting in Paris.
It said however that if by June 2019, Iran does not enact the remaining legislation in line with FATF Standards, then the FATF will require increased supervisory examination for branches and subsidiaries of financial institutions based in Iran. The FATF also expects Iran to continue to progress with enabling regulations and other amendments.
Iran will remain on the FATF Public Statement until the full Action Plan has been completed. Until Iran implements the measures required to address the deficiencies identified with respect to countering terrorism-financing 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.
In June 2016, the FATF welcomed Iran’s high-level political commitment to address its strategic AML/CFT deficiencies, and its decision to seek technical assistance in the implementation of the Action Plan. Given that Iran provided that political commitment and the relevant steps it has taken, the FATF decided in October 2018 to continue the suspension of counter-measures.
The Central Bank of Iran, in a statement on Friday welcomed FATF’s move, hoping that the two remaining bills would also soon be finalized. The bank said that in order to show its good will, it will soon introduce the corresponding entity to match European special Purpose Vehicle known as INSTEX.
INSTEX was launched by the EU on January 30 to shield Iran trade from the US sanctions reimposed last year after the country walked out of the international atomic accord it signed with Iran in 2015.
The Paris-based body recounted Iran’s recent progress in implementing its Action Plan, saying that in November 2017, Iran established a cash declaration regime.
“In August 2018, Iran has enacted amendments to its Counter-Terrorist Financing Act and in January 2019, Iran has also enacted amendments to its Anti-Money Laundering Act,” it said.
“The FATF recognizes the progress of these legislative efforts. The bills to ratify the Palermo and Terrorist Financing Conventions have passed Parliament, but are not yet in force. As with any country, the FATF can only consider fully enacted legislation. Once the remaining legislation comes fully into force, the FATF will review this alongside the enacted legislation to determine whether the measures contained therein address Iran’s Action Plan, in line with the FATF standards.”
The Expediency Council refused for a third time last week to come up with a definitive vote whether it rejects or endorses Iran’s accession to the UN Convention on Transnational Crime, commonly known as the Palermo bill.
Palermo bill is one of the four government bills that seek to bring Iran’s anti-money laundering and countering financing of terrorism standards in line with international norms. Out of the four FATF bills only two have become law.
In February 2019, the FATF noted that there are still items not completed and Iran should fully address: (1) adequately criminalizing terrorist financing, including by removing the exemption for designated groups “attempting to end foreign occupation, colonialism and racism”; (2) identifying and freezing terrorist assets in line with the relevant United Nations Security Council resolutions; (3) ensuring an adequate and enforceable customer due diligence regime; (4) ensuring the full operational independence of the Financial Intelligence Unit and clarifying that the submission of STRs for attempted TF-related transactions are covered under Iran’s legal framework; (5) demonstrating how authorities are identifying and sanctioning unlicensed money/value transfer service providers; (6) ratifying and implementing the Palermo and TF Conventions and clarifying the capability to provide mutual legal assistance; and (7) ensuring that financial institutions verify that wire transfers contain complete originator and beneficiary information.