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Palermo Bills Suspended

Iran -- Keyhan Newspaper main report against Joining to FATF on Sunday September 04, 2016.

The Iranian Parliament has shelved the bill on joining the United Nations Convention against Transnational Organized Crime (UNTOC), until learning the explicit stance of the Iranian supreme leader over it.

The bill, known as the “Palermo Bill” in Iran, already approved by the parliament on June 10, faced the Guardian Council's (GC) opposition, which found incompatibility between the text of the bill and its translation.

UNTOC is the UN-sponsored multilateral treaty against transnational organized crime, including money laundering and human trafficking.

Iran, along with Bhutan, Republic of Congo, Palau, Papua New Guinee, Solomon Islands, Somalia, South Sudan and Tuvalu, is the only member of the UN that is not a signatory to the convention.

President Hassan Rouhani’s administration has proposed four Palermo Bills concerning the Financial Action Task Force (FATF), UNTOC, and the United Nations Office of Drugs and Crimes (UNODC), hoping to reduce international pressures on Iran’s deteriorating economy.

Nevertheless, in an orchestrated response, Supreme Leader Ayatollah Ali Khamenei and his close allies in the GC and influential Expediency Discernment Council (EDC) have repeatedly barraged the bills with bitter criticism.

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.

Furthermore, 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.”

The parliament's Legal and Judicial Commission was assigned to discuss the returned bill and amend it as required by the GC.

The spokesman of the sommission, Hassan Norouzi, said on July 25, "The commission held its session on Tuesday and decided to suspend discussions over the bill, until learning the supreme leader’s explicit and final stance over UNTOC.”

Reportedly, the session was also attended by Iran’s number two nuclear negotiator and deputy foreign minister, Abbas Araqchi, the Intelligence Minister’s deputy and a representative from the Islamic Revolutionary Guards Corps’ Intelligence Organization.

Araqchi had earlier said that although joining UNTOC and FATF is not directly related to Tehran’s talks with the EU to keep the Joint Comprehensive Plan of Action (JCPOA) alive, it could have a significant impact on the negotiations.

There were two approaches against Khamenei’s stance over the bills, Hassan Norouzi said, adding, “While several members of the Legal and Judicial Commission argued that the supreme leader has explicitly expressed his opposition with passing the bills, other members believed that, during a discussion with President Rouhani, Khamenei had agreed to let MPs consider and review the bills.”

The mid-ranking cleric Hassan Norouzi maintained, “The commission decided to write a letter to the supreme leader, requesting him to present his explicit and final decision over the bills.”

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 a chance to Iran to lay the necessary groundwork for joining international conventions against money laundering and financial assistance to terrorism.

FATF took a harder line on June 29 on Tehran. 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.