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World

AFP
February 21, 2020

FATF sanctions Iran over lax terror financing laws

World

AFP
Fri, Feb 21, 2020
President Rouhani. PHOTO BY: AFP

The Financial Action Task Force (FATF) sanctioned Tehran Friday over its inability to curb  terror financing, said the  watchdog. 

In a statement issued after a meeting in Paris, the Financial Action Task Force (FATF) said it was rescinding a suspension of the measures, granted in 2016, to give Tehran time to work on reforms.

The FATF "fully lifts the suspension of counter-measures" it said, citing Iran´s failure to enact the UN´s 2001 Palermo Convention against organised crime and the Terrorist Financing Convention.

It also urged FATF member states and "all jurisdictions to apply effective counter-measures".

Iran is alone with North Korea on an FATF blacklist, which severely restricts their access to loans and international aid. The agency has 37 nations and two regional organisations as members.

Iran´s government has hoped to salvage banking and trade ties after the United States walked out of a landmark 2015 nuclear deal and reimposed crippling unilateral sanctions.

The other parties to that deal -- Britain, France, Germany, China and Russia -- have sought to salvage the agreement and maintain trade with Iran, but have called on Tehran to meet the FATF requirements.

In a bid to do so, the government drafted amendments to laws aimed at curtailing counter-terrorist financing and money laundering.

But it has yet to ratify the two conventions, and the FATF said Iran had further work to do on criminalising terrorist funding, identifying and freezing terrorist assets, and properly regulating wire transfers.

The FATF it would keep Iran on the "high risk jurisdictions" blacklist, and will decide on next steps "if Iran ratifies the Palermo and Terrorist Financing Conventions, in line with the FATF standards."

Counter-measures include audits of Iranian banks and subsidiaries, and stricter oversight of their transactions.

"Until Iran implements the measures required to address the deficiencies identified with respect to countering terrorism financing... the FATF will remain concerned with the terrorist financing risk emanating from Iran and the threat this poses to the international financial system," it said.