Listen to this articleListen to this article | 7 minsinfoTehran, Iran – Iran says it will continue efforts to get out of a blacklist of a prominent global watchdog on money laundering and “terrorism” financing despite “20 years of obstruction” from domestic opponents.The statement by the Financial Intelligence Unit of Iran’s Ministry of Economic Affairs on Sunday came two days after the Paris-based Financial Action Task Force (FATF) renewed its years-long blacklisting of Iran, according to a report by the official IRNA news agency.Recommended Stories list of 4 itemsend of listThe FATF also ramped up measures aimed at isolating Iran from global financial markets with a particular focus on virtual asset service providers (VASPs) and cryptocurrencies.It recommended member states and financial institutions around the world to:
Refuse to establish representative offices of Iranian financial institutions and VASPs or consider the noncompliance risks involved.
Prohibit financial institutions and VASPs from establishing offices in Iran.
On a risk basis, limit business relationships or financial transactions, including virtual asset transactions, with Iran or people inside the country.
Prohibit financial institutions and VASPs from establishing new correspondent banking relationships and require them to undertake a risk-based review of existing ties.
Even the flow of funds involving humanitarian assistance, food and health supplies as well as diplomatic operating costs and personal remittances are recommended to be handled “on a risk basis considering the “terrorist” financing or proliferation financing risks emanating from Iran”.What does the FATF move mean?Iran has been blacklisted by the FATF for years and is currently on the list in the company of just two other countries: North Korea and Myanmar. Advertisement Since October 2019, Iran has had “heightened measures” like supervisory examination and external audit requirements recommended against it and has been subject to “effective countermeasures” since February 2020.This contributed to making access to international transactions increasingly difficult or impossible for Iranian banks and nationals and made the country more dependent on costlier shadowy third-party intermediaries for transactions.The new countermeasures emphasise existing frameworks but also specifically cite virtual assets, signalling an increased focus.The fact that the FATF also urges countries and global institutions to remain wary of risks of having any dealings with Iran may mean even more limited transaction opportunities for Iranian entities and nationals.Small banks maintaining old correspondent relations with Iranian counterparts may also reconsider after being recommended to re-evaluate existing links.The isolation has hobbled state-run or private income streams and contributed to the continuous depreciation of the Iranian rial over the years.Links with Iran’s nuclear dilemmasThe FATF, formerly known by its French name, was established by the Group of Seven (G7) countries in 1989 to combat money laundering but later had its mandate expanded to countering financing of “terrorism” and weapons of mass destruction.It has been formally raising concerns about Iran since the late 2000s, which is also when it started calling for countermeasures as international tensions grew over Iran’s nuclear programme and the country was sanctioned by the United Nations Security Council.But a year after Iran signed a landmark 2015 nuclear deal with world powers that lifted the sanctions, the FATF also acknowledged a “high-level political commitment” from Iran and agreed to an action plan for the country to address its compliance requirements.The centrist government of President Hassan Rouhani, who had clinched the deals, pressed ahead with ratifying several laws needed to fulfil the action plan despite opposition from hardliners who were firmly against the increased financial transparency and international supervision.But United States President Donald Trump unilaterally reneged on the nuclear deal in 2018, imposing a “maximum pressure” campaign that has remained in effect until today. The move empowered the argument from the hardliners in Tehran, …
