Shabtabnews In this dark night, I have lost my way – Arise from a corner, oh you the star of guidance.
Radiofarda – The myriad problems faced by Iranian banks stem not from sanctions, but from their failure to follow international banking rules, an official study by the Iranian parliament’s research center reports.
“Despite the common perception among people and some of our elites, a considerable amount of problems in the relationship between Iranian and foreign banks is non-sanction related,” the study reads.
Based on the excerpts of the report published May 16, Iranian banks are significantly lagging behind in observing the Basel III requirements—an accord that addresses regulation, supervision, and risk management of banks, as well as basic anti-money laundering practices and rules for combating the financing of terrorism.
The report also mentions Iran’s poor ranking in the annual report of the Basel Institute of Governance, which works with the public and private sector to counter corruption.
In its 2017 Anti Money Laundering (AML) index , the Swiss group listed Iran along with Afghanistan and Guinea-Bissau as the riskiest countries in terms of money laundering and terrorist financing among 146 countries in the world.
Additionally, the Financial Action Task Force (FATF), a G-7 initiative to combat money laundering and financing terrorism has placed Iran beside North Korea at the top of the list of countries with the highest economic and financial risks.
Due to the lack of strong supervisory institutions in the country, Iranian banks have a poor track record on meeting international standards regarding financial reporting and transparency.
In fact, from 157 countries, Iran is among 23 states that does not follow International Financial Reporting Standards (IFRS), a set of accounting standards developed for improvement of reporting financial results and financial position of the banks.
All these factors have resulted in a lack of trust in the Iranian financial system by foreign banks, which mostly avoid doing business in the country.
In another report published in June 2016, the same institution described the situation of the Iranian banks as “crisis-prone” and warned about their imminent insolvency.
