Iran’s economy minister announced on Tuesday that the Supreme Leader has approved revisiting two critical international conventions required to ease banking restrictions resulting from Iran's blacklisting by the money laundering watchdog, the Financial Action Task Force (FATF).
Abdolnaser Hemmati wrote on X, "The president informed me that the Supreme Leader has approved revisiting the Palermo and CFT bills related to the FATF in the Expediency Discernment Council."
The Expediency Discernment Council, which mediates disputes between parliament and the Guardian Council (a constitutional watchdog), became involved after parliament approved the legislation but the Guardian Council rejected the two bills concerning the Palermo and CFT conventions regulating money laundering and financing of terror groups.
The Financial Action Task Force (FATF), established by the G7 member countries to safeguard the international financial system, influences banking policies in most countries and guides businesses aiming to protect their own integrity and reputations.
Iran's status on the FATF blacklist has had a major impact on its international banking operations. The country remains on the list of high-risk countries with serious strategic deficiencies in countering money laundering, terrorist financing, and proliferation financing.
Iran needs to finalize legislation enabling the enactment of two international conventions: the International Convention for the Suppression of the Financing of Terrorism (CFT) and the UN Convention against Transnational Organized Crime (Palermo Convention).
The dispute between the parliament and the Guardian Council was referred to the Expediency Council in 2019 for arbitration.
The Expediency Council has stalled the matter since then, neither approving nor rejecting the bills. The inaction is apparently due to objections from hardliners, such as the Chairman of the Expediency Council Sadeq Amoli Larijani, who argue that joining the conventions would harm Iran's national security by exposing its dealings with regional Tehran-backed allies—precisely the activities these international agreements are designed to address.
“If you ask my personal opinion, Palermo and CFT are extremely detrimental to national security,” Larijani said in 2020.
Iran will remain on the FATF's list of High-Risk Jurisdictions Subject to a Call for Action until it fully implements its action plan, including ratifying the Palermo and CFT. Only then will the FATF consider next steps, such as suspending countermeasures.
The FATF says it remains concerned about the terrorist financing risk from Iran and its threat to the international financial system until these measures are implemented.
Even if Iran joins the FATF, more must be done to attract foreign investment, Mohammad Khazaei, Secretary-General of the Iranian Committee of the International Chamber of Commerce (ICC), said earlier in the year.
