Iranian Official Hints At Accession To FATF Financial Rules

iranintl – The chairman of Iran’s chamber of commerce says he has heard rumors that the government intends to meet the standards of FATF, the global money-laundering watchdog. 

Hossein Selahvarzi, the chairman of Iran’s Chamber of Commerce, Industries, Mines and Agriculture said Sunday that there is “unofficial news about the accession to the money-laundering watchdog, the Financial Action Task Force (FATF) and the possibility of more serious economic negotiations.” 

Iran’s previous government submitted four bills to parliament in 2017 to adopt laws to implement FATF’s standards. The parliament approved the bills, but the hardliner Guardian Council, which has the final say, rejected two of the bills: One about joining the UN’s Palermo convention to fight international organized crime and the other to join the CFT (Combat Financing Terrorism) convention.

As stated repeatedly by experts, Iran’s international trade will continue to suffer without accession to the FATF, even if US sanctions are lifted. In June, FATF retained Iran on its blacklist along with North Korea as Tehran remains reluctant to comply with global regulations. 

Experts say that even if sanctions imposed by Western countries on Iran are lifted, Tehran must adhere to FATF standards in banking and financial controls to be considered a safe business partner by international actors. Most important are measures to prevent money laundering and financing of terrorism. 

Opponents argue that if Iran accedes to FATF demands it will not be able to provide financial help to allied groups in the region that are part of Tehran’s “axis of resistance”. These groups, such as the Lebanese Hezbollah and some Palestinian militant organizations, are designated as terrorists by the United States and others, and act as proxy forces to help the Islamic Republic spread its influence in the region. 

Speaking at an event hosting representatives of the country’s chambers of commerce in Mashhad, he claimed that “News and rumors about removing barriers to foreign trade, the lifting of sanctions, and even the acceptance of FATF rules have emerged, which in reality are not accurate.” He cautioned against persisting with past foreign policies that have imposed significant limitations on economic activities, particularly on the private sector. 

Most hardliners are of the opinion that abiding by the regulation of the FATF is too much transparency for the Islamic Republic, which has resorted to a repertoire of illegal tricks and loopholes to circumvent sanctions on its banking system for international trade and its secret financing of militant proxy groups. 

Parliament Speaker Mohammad-Bagher Ghalibaf said Saturday that ‘BricksPay system – a digital payments platform that is being jointly developed by the member countries of the BRICS — can be a direct replacement for SWIFT (The Society for Worldwide Interbank Financial Telecommunication). However, even the BRICS members are not looking at the platform as a replacement for other international networks. 

Criticizing the government’s economic policies that have created obstacles in the path of international trade, Selahvarzi said that today numerous economic entities are targeted by state bodies under the guise of controlling the rising inflation rate. He argued that “Inflation is controlled when the inflation-inducing engine is turned off,” he said, referring to Iran’s money printing to finance its deficit, which in turn leads to vicious cycle of more inflation due to high market liquidity. 

He also criticized the government for sidelining private businesses people in the process of devising the budget plans for the country. “I should say that if the oppressive sanctions do not lead to the collapse of Iran’s economy, these economic measures will ground the country’s economy.” 

The recently elected chairman of Iran’s chamber of commerce, who is being challenged by hardliners and the government, had to deal with a hardliner heckler during the Sunday meeting. A man asked about Selahvarzi’s support for the Women, Life, Freedom protests, accusing him of not being trusted by the Islamic Republic.