February 23, 2018

NIAC Welcomes FATF Decision to Continue Suspension of Penalties on Iran

Washington, DC – The National Iranian American Council issued the following statement regarding today’s decision by the Financial Action Task Force (FATF) to continue the suspension of counter-measures against Iran:

FATF made the right decision by recognizing the progress that Iran has made to reform its banking laws, while ensuring that Iran fulfills the terms of its Action Plan in order to receive the full benefit of being removed from the FATF “blacklist”. By showing itself unwilling to give in to pressure from the Trump administration and outside advocacy groups like United Against Nuclear Iran, which were pushing for the re-imposition of counter-measures against Iran, FATF smartly avoided politicization of its work and protected its integrity as a technical body assessing countries’ anti-money laundering and terrorist financing laws.

The Financial Action Task Force is an inter-governmental body that sets and promotes standards for combating money laundering and terrorist financing. FATF engages in a technical assessment of countries’ anti-money laundering and countering the financing of terrorism laws and provides assistance to countries seeking to reform their laws in compliance with international standards.

Iran has been identified on FATF’s “blacklist” since 2008 for persistent AML/CFT (Anti-Money Laundering/Combatting the Financing of Terrorism) deficiencies. Following the nuclear accord, Iran agreed in June 2016 to an Action Plan to undertake domestic reforms to its AML/CFT laws with technical assistance provided by FATF. In response to this commitment, FATF suspended its call for counter-measures against Iran for a period of 12 months.

Iran has made significant progress meeting its Action Plan, including by passing new laws relating to money laundering.However, Iran still has work to do in reforming its terrorist financing laws. FATF’s decision to renew the suspension of counter-measures recognizes the progress that Iran has made thus far, while ensuring that Iran take the final steps to reform its AML/CFT laws before it receives the benefit of removal from FATF’s “blacklist.” Iran’s incentives to undertake serious reform of its banking laws include the potential for broader access to the global financial system, which has been denied Iran despite the lifting of U.S. and UN sanctions pursuant to the nuclear agreement. If Iran wants broader re-integration in the global financial system, then it must take the final steps to meet the terms of its Action Plan with FATF and reform its banking laws consistent with the recognized international standards. These steps are moving forward, yet the Trump administration and its political allies seem more interested in scuttling that progress due to ideological animus towards Iran rather than seeing an actual interest of the U.S. and international community realized.

The Trump administration appears to have pushed hard on FATF member-states to reject the technical assessment of the agency as to Iran’s progress and re-impose counter-measures against Iran. As is true of the nuclear agreement, the Trump administration’s ideological position towards Iran renders it unable to pursue – and often causes it work directly against – U.S. national security interests. In the case of the nuclear agreement, the Trump administration has antagonized allies and jeopardized the restrictions and strict inspections that are in place on Iran’s nuclear program. In the case of FATF, the Trump administration threatens to undermine the progress that Iran is making consistent with the FATF Action Plan to improve the transparency and integrity of its financial sector. The Trump administration showed its isolation once again by seeking to punish Iran through the FATF, despite the fact that the FATF and its other member-states recognize the progress Iran had made to reform its banking laws.

To kill the Iran nuclear deal, the Trump administration has shown itself willing to stake the reputation of international bodies, including the Financial Action Task Force and the International Atomic Energy Agency. The Trump administration is playing a dangerous game with the integrity of global and multilateral institutions. Thankfully, the FATF was able to resist the Trump administration’s machinations this time around.

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