Iran and FATF to Hold First Direct Talks in Six Years

TEHRAN (Iran News) According to the center, the invitation was extended to Hadi Khani, Secretary of Iran’s Supreme Council for the Prevention and Combating of Money Laundering and Terrorism Financing. The meeting is scheduled to take place in Madrid, Spain, and will focus on normalizing Iran’s standing with FATF, suspending countermeasures, and ultimately removing the country from the so-called “blacklist” of high-risk jurisdictions.

FATF, the Paris-based global watchdog, sets standards for combating illicit financial flows and evaluates countries’ compliance through regular assessments. Iran was placed on the FATF blacklist in February 2020 after failing to enact key reforms, including the ratification of certain UN conventions seen as vital for transparency and cooperation.

One of FATF’s key demands has been Iran’s accession to the Palermo Convention — the United Nations Convention against Transnational Organized Crime — and its complementary treaty, the Convention on Combating the Financing of Terrorism (CFT).

After years of political back-and-forth between Iran’s parliament, the Guardian Council, and the Expediency Council, the Palermo Convention was finally ratified earlier this year. The Ministry of Foreign Affairs is now working to deposit the ratification instrument with the UN’s treaty office, a formal requirement for the convention to take full legal effect internationally.

In a letter dated August 5, 2025, Iran’s ambassador to the United Nations, Saeed Iravani, informed UN Secretary-General António Guterres that, on government orders, the ratification document for the Palermo Convention would be formally deposited. The letter noted that the convention had been signed by then-Deputy Foreign Minister Seyed Abbas Araghchi on July 30, 2025.

Iran had initially signed the Palermo Convention on December 12, 2000, but the process of ratifying it into law faced repeated political and legal hurdles. The parliament approved the bill in 2017, but objections from the Guardian Council stalled progress. Only in May 2025 did the Expediency Council — which arbitrates disputes between parliament and the Guardian Council — approve the measure.

On May 21, 2025, Iran’s parliament speaker formally conveyed the ratification to the president for implementation under Article 123 of the Iranian constitution.

The Palermo Convention is one of four international treaties FATF considers essential for full compliance with its standards. Iran has already joined two of the four. Ratifying the CFT treaty — which addresses terrorism financing specifically — remains the final step toward fulfilling FATF’s core demands.

Experts say completing this process could significantly improve Iran’s global financial reputation, making it easier to reestablish banking ties and expand economic relations despite ongoing sanctions and geopolitical tensions.

“Joining the CFT, as the complement to Palermo, would be another crucial step toward building international trust in Iran’s financial transparency,” analysts note. “Completing all four FATF conventions could remove major obstacles to engagement with the global banking system.”

Iran’s blacklisting by FATF has compounded the country’s financial isolation, making cross-border payments more costly and cumbersome, even with countries not enforcing U.S. sanctions. Suspension of FATF countermeasures could give Iran a modest but tangible boost in trade facilitation, while signaling a willingness to cooperate with global anti-crime frameworks.

The upcoming Madrid meeting is therefore being viewed as a potential turning point. If progress is made, Iran could begin the process of exiting FATF’s blacklist for the first time since 2019, though analysts caution that significant compliance steps — including CFT ratification — are still needed.

For now, Tehran appears to be using the Palermo ratification as a confidence-building measure to restart dialogue with FATF, breaking a diplomatic deadlock that has lasted more than half a decade.