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Hardliners Move To Block International Financial Transparency Agreements

A session of Iran's Expediency Discernment Council, on Saturday October 07, 2017.

Forty conservative MPs have sent a letter to the Expediency Council (EDC), urging it to reject a package of bills making Iran a party to several international agreements on combating terrorism financing and money laundering.

Known collectively in Iran as the Palermo Bills, the legislation would pave the way for the country to join the Financial Action Task Force (FATF), the United Nations Convention Against Transnational Organized Crimes (UNTOC), Combatting Financing Terrorism (CFT), and the United Nations Office of Drugs and Crimes (UNODC) -- in the hope of reducing international pressure on Iran’s already deteriorating economy.

Originally proposed by President Hassan Rouhani in November last year, the bills have met staunch resistance from hardliners, including Supreme Leader Ayatollah Ali Khamenei, who says the agreements have been “cooked up” by foreign enemies.

“It is not necessary to join conventions the depths of which we are unaware of,” he said, proposing instead that parliament create its own laws to combat money laundering and terrorism funding rather than join an international convention.

FATF has given Tehran until February to either endorse the UNTOC or be added to its “black list” of countries refusing to cooperate in the fight against terrorism financing and money laundering.

Iran has long provided support for groups such as Lebanon's Hezbollah movement, which has been designated by the United States as a terrorist organization.

Frustrated with hardline opposition and anticipating a rejection of the bills by the Guardian Council (GC), Parliament Speaker Ali Larijani decided to present the bills directly to the EDC after they’d been approved by parliament in an apparent attempt to circumvent the GC.

The EDC’s traditional role has been rather to act as an arbiter in disputes between parliament and the GC, and it has already rejected parts of the bills.

The EDC has argued that joining FATF is against Iran’s policy of “resistance economy,” and will jeopardize Iran’s economic and food security and discourage investment.

In their letter, the hardliner MPs pointed out that the EDC cannot independently intervene in the process of legislation by rejecting or approving proposed bills and parliamentary motions. They argued that the speaker's decision to submit the bills directly to the EDC is against Article 25 of EDC's internal regulations, as well as Article 112 of the Islamic Republic's constitution and Article 25 of parliament's internal guidelines.

Nonetheless, during recent years the EDC has established a 15-member group called the "Supreme Supervisory Board" (SSB) that weighs the bills and motions passed by parliament to verify their compatibility with the long term general policies of the Islamic Republic’s system. The group was established by an edict issued by Supreme Leader Khamenei in 2013.

The 15-member group is predominantly comprised of conservative and ultraconservative figures, including mid-ranking cleric and Rouhani's main challenger in last year presidential election, Ebrahim Raeisi.

The letter represents the first time such a large group of MPs have openly challenged the power of the EDC.