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Iran Postpones Approval Of UN Convention Against Transnational Crime

IIran's Expediency Discernment Council meeting, on January 05, 2019.

Ahmad Tavakoli, an Expediency Discernment Council member in Tehran told reporters on Saturday that the EDC meeting on the bill for joining the UN Convention on Transnational Crime has remained inconclusive and the Council will meet once again next Saturday for the final review of the bill.

The EDC is the constitutional arbiter between the Iranian Parliament (Majles) and the hardliner-dominated Guardian Council that endorses or rejects Majles legislations.

The international watchdog, Financial Action Task Force (FATF) has demanded Iran to approve legislation complying with conventions against money laundering terrorism financing and transnational crime.

For more than a year, Iran’s political factions have been wrestling with FATF demands; with parliament drafting laws and the conservative body constitutionally tasked to approve all legislation, opposing some of the new laws. Now the pending legislation is with the EDC, which will have the final say on the matter.

Without the internationally required legislation Iran will have a tougher time to do business and banking with the rest of the world.

President Hassan Rouhani's deputy for Legal affairs, Laya Joneydi January 18 called on the EDC to accelerate the procedure of reviewing the bill on Iran's accession to the UN Convention against Transnational Organized Crime (UNTOC).

The EDC met with the speaker of parliament and foreign minister attending to add weight to the government’s demand for approval, but Iranian media says details were not discussed and the meeting did not resolve anything.

The convention is part of four bills Iran has to officially approve as required by the FATF. The legislation of the bills would pave the way for Iran to meet the requirements of 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.

Nevertheless, the most important part of the bills, CFT, has been rejected as "flawed", and the Majles is currently working on the points found "problematic" by the GC.

Time is running out for Tehran, since FATF has given the Islamic Republic until late-February to either endorse the UNTOC or be added to its “blacklist” of countries refusing to cooperate in the fight against money laundering and financing terrorism.

Furthermore, although the passage of the bills is not directly connected to EU-Iran talks on keeping Joint Comprehensive Plan of Action (JCPOA) or Tehran's nuclear deal with world powers alive, Iranian Deputy Foreign Minister, Abbas Araqchi, has admitted that it would help the negotiations.

Echoing Araqchi's remark, Laya Joneydi also acknowledged on Friday that the passage of the bills will "pave the way" for the SPV, which is a proposed European mechanism to facilitate trade with Iran in the face of U.S. economic sanctions.

The Special Purpose Vehicle (SPV) is designed to act as a kind of clearinghouse that could be used to help match Iranian oil and gas exports against purchases of EU goods in an effective barter arrangement. However, no EU country has come forward as a potential host - delaying the plans.

Moreover, the International Monetary Fund (IMF) has also urged Tehran to endorse the laws against money laundering and financing terrorism, before the deadline (next month) set by FATF.