Sadeq Amoli-Larijani, head of the Iranian regime’s Expediency Council, announced the council had started a new review of the Palermo and CFT conventions of the Financial Action Task Force (FATF), an international anti-moneylending organization. The recent review resulted in a new round of infighting by the clerical regime.
FATF is an inter-governmental body that sets international standards that aim to prevent illegal financial activities and the harm they cause to society. According to its website, “As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.”
FATF divides countries into three categories:
- Countries that fully comply with the group’s recommendations and have implemented them.
- Countries that are developing and adapting to specified standards.
- Countries at risk of money laundering and terrorist financing.
The FATF blacklist includes countries that do not comply with financial and money laundering regulations. In other words, the third group. FATF has two important conventions, the Palermo convention, the United Nations Convention against Transnational Organized Crime, and the Terrorist Financing Convention (CFT).
Iran’s clerical regime has been on the FATF blacklist since 2015. Following Iran’s 2015 nuclear deal with world powers, while the regime was on the FATF blacklist, the organization suspended any reciprocal action or put the regime in a so-called “gray situation.”
The FATF gave time to Tehran to ratify the organization’s bills and conventions, such as Palermo and CFT, in the parliament. Otherwise, the FATF would initiate a financial boycott of the regime. The FATF extended the deadline several times in a bid to give the regime enough chances to pass the bills.
Approving the FATF bills escalated the regime’s infightings. Iran’s economy and the regime’s terrorist activities are controlled by the Revolutionary Guards (IRGC). The IRGC and its subordinates are on the United States list of terrorist organizations. Also, terrorist groups such as Hamas and Hezbollah are on the regime’s payroll.
Approving the FATF means the regime must stop financing terrorism. On the other hand, if it refuses to approve these conventions, the regime will economically suffocate.
Thus, the Palermo and CFT conventions were repeatedly passed around by the regime’s parliament, the Guardian Council, and Expediency Council.
Finally, after months of delay, the regime’s supreme leader, Ali Khamenei, accused the FATF of being “the result of the think tanks of the great powers.” “The parliament, which is mature and wise, must legislate independently on issues such as the fight against terrorism or the fight against money laundering,” he said on June 20, 2018.
Therefore, the regime reached a dead-end in approving the FATF conventions. Refusing to approve the FATF meant accepting new tough sanctions and an international financial boycott, with huge economic consequences. If the regime had ratified the FATF conventions, it would have had to stop funding terrorism, which is its inseparable part.
Ultimately, the regime refused to approve the FATF regulations, so the organization put Iran on its blacklist in March 2020.
Now why after a year has Khamenei ordered the Expediency Council to review this matter, while he knew this would result in new rounds of infighting?
The regime is in a deadlock. It must cooperate with the international community, which requires the regime to take necessary steps, including the FATF conventions’ approval, thus ceasing its support for terrorism.
Approving the FATF means the regime must agree to be thoroughly investigated, mainly allow its institutionalized corruption to fall under the magnifying glass. “In the time of economic war, it makes the country and its financial information like a glass room,” said Hassan Shojaei, Deputy Chairman of the Article 90 Parliamentary Commission, on Tuesday in this regard.
Meanwhile, if the regime still refuses to approve the FATF conventions, it will have to accept international pressure and remain on the FATF blacklist. Thus, “the result of the continuation of such conditions is nothing but the continuation of [the regime’s] suffering,” according to Javid Ghorbanoglu, a former diplomat.
Khamenei has now vaguely and ambiguously given the green light to the Expediency Council to review the FATF, due to his regime’s economic suffocation.
Yet, Khamenei’s act has increased the regime’s infighting, adding to the regime’s crises.