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After years of political infighting and institutional deadlock, the clerical dictatorship in Iran has officially ratified the Palermo Convention. But is this a genuine step toward financial transparency, or a symbolic move aimed at deceiving foreign powers and empowering the regime’s lobby abroad to argue for “diplomacy?”
On May 24, Speaker of Parliament Mohammad Bagher Ghalibaf formally communicated the law’s ratification to the regime’s president Masoud Pezeshkian, completing a legislative cycle that began in 2018. The move came after the Expediency Discernment Council, under renewed instructions from Supreme Leader Ali Khamenei in January, finally approved the bill on May 13—albeit conditionally.
Some factions and proponents within the regime claim this could help lift Iran from the FATF blacklist, facilitating international banking ties and reducing financial isolation. Officials from the Ministry of Economy and Central Bank argue that compliance with international norms, including this convention against transnational organized crime, is vital for attracting investment and improving trade relations.
Khamenei’s Authority Challenged as #Iranian Regime Splits Over US Negotiations and FATFhttps://t.co/chshxBAW4Q
— NCRI-FAC (@iran_policy) March 15, 2025
Critics argue the move is a sham—part of a calculated effort to deceive the U.S. during nuclear talks while empowering regime-aligned lobbies and think tanks in the West to push a narrative of fake diplomacy.
However, some extremist elements within the regime fear that such concessions, however superficial, could be interpreted as signs of weakness. They worry it may further demoralize Iran’s already strained proxy forces and embolden opponents at home and abroad to intensify pressure on Tehran.
Meanwhile, fierce debate has erupted over Ghalibaf’s swift implementation of the Palermo law. MP Mehdi Koochakzadeh insisted the current parliament would vote against Palermo if given the chance, calling claims of broad legislative support a fabrication.
#Iran’s Internal Turmoil Over #FATF Reveals Deepening Cracks in Clerical Regimehttps://t.co/SMUn4FITod
— NCRI-FAC (@iran_policy) January 17, 2025
MP Mohammad-Taqi Naghdali also questioned why Ghalibaf executed the Palermo bill immediately, while a religiously charged “hijab and chastity” law remains frozen by the Supreme National Security Council. Ghalibaf responded that the Palermo law had passed all legal stages and that the delay in the hijab law came under explicit instruction from the Council.
Despite Palermo’s passage, the larger FATF agenda remains unresolved. The Iranian regime has yet to ratify the CFT (Combating the Financing of Terrorism) convention—widely seen as a red line due to Tehran’s financial support for regional militias. Without full compliance, the regime will still face escalating isolation and internal contradictions. Even partial implementation may signal weakness domestically and fail to yield meaningful change abroad.