Tehran’s representative to the Iranian Parliament says that Supreme Leader Ayatollah Ali Khamenie has approved ratification of the bills related to money laundering.
“I have heard from a well-informed source that the leader has expressed his consent toward the approval of the bills concerning the fight against money laundering," pro-reform MP Mahmud Sadeghi tweeted on September 6 without further elaboration.
President Hassan Rouhani’s administration on November 8, 2017, tabled four bills (known as the Palermo Bills in Iran) for the parliament’s approval -- 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 deteriorating economy.
The bills are proposed to mitigate increasing pressure on Tehran, while the 2016 Basel 2016 Basel Anti-Money laundering (AML) Index has identified Iran as the highest money-laundering risk out of 149 countries surveyed.
Nevertheless, in an orchestrated response to the bills, Khamenei and his close allies on the Guardian Council (GC) and the influential Expediency Discernment Council (EDC) have repeatedly criticized the bills.
Ten days after the parliament initially approved the bill concerning UNTOC, Khamenei personally stepped in on June 20 and called the bill “unacceptable.”
According to Khamenei, UNTOC had been “cooked up” by foreign powers and the parliament should shelve it.
“It is not necessary to join conventions the depths of which we are unaware of,” he said, proposing instead that the parliament create its own laws to combat money laundering and terrorism funding rather than join an international convention.
State-run news agency IRNA cited GC spokesman Abbas Ali Kadkhodaei as saying on July 14, “Iran’s membership in UNTOC is against both the security policies of the country and the resistance economy.”
Conservative allies of Khamenei believe that approval of the Palermo Bills might jeopardize Iran’s financial assistance to what they describe as the “resistance front," including Hamas and Lebanese Hezbollah.
Though the bills are not directly tied to talks between the EU and Tehran to keep the Joint Comprehensive Plan Of Action (JCPOA), or Iran nuclear deal with world powers, alive, the deputy foreign minister of Iran, Abbas Araghchi, has admitted that approving the bills would help the Iranian side in its negotiations with Europe.
The bills, if approved, would remove Iran from FATF’s “gray list” and facilitate the country’s economic transactions with the world, state-run news agency IRNA reported.
FATF, a G7 initiative to combat money laundering and terrorism financing, has placed Iran beside North Korea for nearly two decades at the top of the list of countries with the highest economic and financial risks. This has brought tough banking restrictions on Iran that could be eased if the country joined the UN convention and accepted other reforms demanded by FATF.
While FATF does not have the authority to impose sanctions, a country blacklisted by the world’s financial watchdog will face severe pressure in its financial dealings with other countries.
Iran has been on the blacklist of FATF since 2009, but the international organization has suspended Tehran from the list during the past two years, giving the country the chance to lay the groundwork for joining international conventions against money laundering and financial assistance to terrorism.
FATF took a harder line on June 29. The group warned Iran of "appropriate and necessary actions" if it does not to enact amendments in full compliance with its standards.
In order to get off the FATF blacklist, Tehran needs to pass the bill, but conservative MPs are concerned over certain limitations that the convention might impose on Iran’s ties with what they describe as “resistance groups," including Lebanese Hezbollah and Palestinian Hamas.
Iran has until October to adopt the financial reforms proposed by FATF as part of efforts to improve Iran’s ability to interact with the international banking and trade system.