On June 24, 2016, the Financial Action Task Force (FATF) acknowledged Iran’s high-level political commitment to an Action Plan and their active decision to seek technical assistance in its implementation. As a result, FATF—whose purpose is the development and promotion of policies to combat money laundering and terrorist financing—suspended its calls for counter-measures on Iran for a 12 month period in order to monitor Iran’s progress in implementing the Action Plan. The move by FATF acknowledges the positive steps taken by Iran to resolve concerns regarding its banking sector–and moves Iran off the FATF “black list” and onto its “grey list.” The decision, while widely anticipated, has left Iran hawks divided in their response.
Iran’s inclusion on FATF’s blacklist had been utilized by JCPOA opponents to argue against the nuclear accord and Obama administration attempts to ensure the provision of sanctions relief. Senators Marco Rubio (R-FL) and Mark Kirk (R-IL) cited FATF’s designation of Iran and its calls for counter-measures as the primary reason for blocking administration efforts to reinstate a version of the U-turn license (under which the U.S. would permit certain dollar clearing on behalf of Iran through the U.S. financial system). In April, House Foreign Affairs Committee Chairman Ed Royce likewise claimed that FATF’s concern with Iran is “why I’m working with colleagues on both sides of the aisle on legislation to put in place strict statutory prohibitions to keep Iran from receiving the benefits of accessing the U.S. financial system.” House Majority Leader Kevin McCarthy and Rep. Jeb Hensarling also cited FATF’s call for countermeasures on Iran as the reason to oppose further diplomatic engagement with the Islamic Republic.
When U.S. officials hinted that FATF might loosen restrictions on Iran in recognition of Iran’s progress in reforming its banking laws, opponents of the nuclear accord intensified efforts to maintain the status quo. Chairman Royce penned a letter to Treasury Secretary Jack Lew, urging him to ensure that Iran remained on FATF’s list of countries that are “high-risk and non-cooperative jurisdictions” and to keep in place FATF’s call for counter-measures against Iran. Outside groups like United Against Nuclear Iran (UANI) acted similarly, urging FATF to reinstate and strengthen its call for member-states and other jurisdictions to impose countermeasures against Iran.
Yet when FATF suspended its call for countermeasures, Chairman Royce, UANI, and other deal opponents spun the decision as a victory and vindication of their efforts. Careful observers will note the irony; Royce, UANI, and others had expressly called for FATF to keep in place its call for countermeasures against Iran and not to recognize the progress made by Iran in reforming its banking laws.
It is no surprise that those who utilized FATF’s stance on Iran as a means to dissuade trade and commercial engagement with Tehran are trying to square a circle and claim victory for their side. For them, bad news on Iran is good news, even when such bad news has to be invented. For its part, AIPAC was not in sync with UANI and Royce’s frame–they condemned the FATF statement as “dangerous.” However, FATF’s position is clear: Iran has made progress in reforming its banking laws; Iran has made a “high-level political commitment” to an Action Plan that commits Iran to further reform; and Iran is now deserving of a suspension of the call for countermeasures to be imposed. Being the expert global anti-money laundering and anti-terrorism organization, FATF’s judgment is to be trusted in all matters – not just when its judgment happens to run in parallel with an anti-Iran platform.