FATF Execution to Continue

All interactions with FATF will be carried out under the supervision and within the framework set by the High Council on Anti-Money Laundering

Financial Tribune- All interactions with FATF will be carried out under the supervision and within the framework set by the High Council on Anti-Money Laundering

The High Council on Anti-Money Laundering on Tuesday issued a statement in defense of collaboration with the Financial Action Task Force –an international initiative to combat money laundering and terror financing–saying fulfilling the demands of the international body will be in line with national security and interests.

"The decision to cooperate with FATF was made by the council with the unanimous consensus of all members, including the minister of economy, the minister of industries, mines and trade, the minister of intelligence and the governor of the Central Bank of Iran," read the statement cited by IBENA.

"All interactions with FATF will be carried out under the supervision and within the framework set by the High Council on Anti-Money Laundering. It will be in accordance with national interests and take intelligence and security issues into consideration. Therefore, no state organization or body is allowed to interact with the group independent of the council."

The intergovernmental FATF was founded in 1989 to combat money laundering, but its mandate expanded to act on terrorism financing in 2001. The group decided in late June to keep Iran on its blacklist of high-risk countries but welcomed Iranian promises to improve and called for a one-year suspension of some restrictions on Tehran.

Cooperation with FATF has recently attracted much controversy and media backlash among hardliners who assert that it would lead to the disclosure of the country's financial affairs to the organization.

"Regarding this, it must be noted that FATF only concerns itself with policies, procedures, rules and regulations," the statement noted. "It does not engage in the collection of data pertaining to specific transactions and deals, as the group has no mechanisms in place to receive info from banks and countries."

On concerns regarding the leaking of Iran's financial records to other countries such as the United States, the council notes that no FATF member is obligated to share the information of its clients with other members and any exchange of information will be handled only through bilateral agreements.

In defense of FATF membership, the powerful council pointed to another case in point, emphasizing that Iran will not be forced to accept the definition of terrorism espoused by western countries.

"FATF has provided no specific definition for terrorism. It has instead chosen to elaborate on vocations and methods that are normally employed by financiers of terror and has provided the necessary precautions," the council said.

"The Terrorist Financing Convention of 1999 [formally the International Convention for the Suppression of the Financing of Terrorism] provides a definition for terrorism that has also been accepted in the Anti-Money Laundering Law that was passed by the Iranian Parliament in 2014 with minor changes in the wording. Therefore, from a conceptual standpoint, Iran sees eye to eye with the global community when it comes to the definition of terrorism."

Another problem with continuing cooperation with FATF, as claimed by the critics, is that Iran will have to implement some of the resolutions issued by the United Nations pertaining to terrorism that would ultimately impose more sanctions on Iran.

The council responds by saying that the main UN resolution in question is Resolution 1267 which is about Al-Qaeda, Taliban, ISIS and other terrorist outfits and people associated with them.

"Like many other countries, Iran itself has been a victim of terrorist attacks masterminded by these groups and so the points of the resolution have already been implemented by Iranian banks for years," it said.

If Iran continues to work with FATF, critics say, the country will be forced to accept unilateral sanctions imposed by the US. Therefore, Iranian banks will be obligated to cut off any link with entities still on the black list.

The High Council on Anti-Money Laundering counters this idea by saying that "from a technical and expert standpoint, there are no references within FATF's standards that would obligate Iran or any other countries to implement sanctions put in place by the US. The US sanctions regime exists independent of FATF".

"Furthermore, it has been clearly stated in the JCPOA [the official name of Iran's nuclear accord with world powers] that all Iranian nationals should be allowed to establish financial and economic relations with one another."

In conclusion, the council notes that cooperation with FATF is a "necessity" that is outside the nuclear deal and not a concern exclusive to the current administration.

At present, 198 countries have embraced FATF's recommendations, making the number of countries that are a member of FATF surpasses those of UN members (193).

"Considering this fact and in keeping with the constitution and the good of the country, implementing FATF standards is a vital effort to combat corruption and improve international relations," the council said.

"International collaborations will, therefore, continue until the desired goals are achieved."

Financial Tribune
Publish Date: Sep 7, 2016