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What Are the Consequences of the FATF’s Blacklisting of Iran’s Regime?

The FATF blacklist amidst various economic and social crises has dangerous consequences for the mullahs' regime.
The FATF blacklist amidst various economic and social crises has dangerous consequences for the mullahs’ regime.

The Iranian regime was placed on the blacklist of the Financial Action Task Force (FATF) on Friday, after three years of extending the deadline. This will have serious economic and political effect on the regime, particularly after its major failure of its sham parliamentary election which was met by a general boycott.

Among the consequences of the FATF’s decision is the decrease of the country’s foreign exchange earnings, and the regime’s access to foreign currency resources will become more difficult which would in turn lead to an increase in the exchange rate. 

As a result, the USD trades at more than 15,700 rials from 14,600 rials. The FATF decisions is due to the regime’s non-compliance with the anti-terrorism funding norms.  

“The decision comes after more than three years of warnings from the Paris-based Financial Action Task Force (FATF) urging Tehran to enact terrorist financing conventions,” Reuters reported.

The FATF, which oversees the security of the global financial system and sets banking transaction standards, had given the Iranian regime until February to finalize the laws that will allow the country to join the Palermo and Counter Financing Terrorism (CFT) conventions against funding terrorism and money laundering. 

Since the United States withdrawal from the Iran 2015 nuclear deal with world powers, formally known as the Joint Comprehensive Plan of Actions (JCPOA), citing the regime’s non-compliance and malign behavior, the regime had been clinging to the European countries and its traditional allies, Russia and China. The regime was very much hoping to start the EU financial mechanism, known as the INSTEX, but the EU countries had conditioned any further economic exchange with Iran to the adoption of the FATF’s conventions. Russia and China also earlier told the regime that their banks will face difficulties in dealing with Iran if the CFT and Palermo are not adopted. In a nutshell, under the crushing international sanctions regime had should have adopted these conventions. The regime’s most significant problem with adopting the CFT was the obstacles that CFT imposes on the clerical regime in its support of terrorist groups. This included the Revolutionary Guards (IRGC) which is on the U.S. State Department’s list of foreign terrorist organizations.  

Now that the FATF has backlisted the Iranian regime, financial exchanges with this regime will become more difficult, with international banks and financial institutions more likely than ever before to be under surveillance and pressure to counter Iran’s money laundering and financing of terrorism. 

Iran’s FATF blacklisting will force all countries to comply with the FATF recommendationsThese recommendations will force banks and financial institutions in different countries to stop working with Iranian companies and banks. They also advise companies that deal with the regime to stop working with Iran. 

Mrs. Maryam Rajavi, the President-elect of the National Council of Resistance of Iran (NCRI), said: Backlisting the clerical regime is indispensable to combatting terrorism and warmongering in the Middle East and across the globe.  

The mullahs consciously and deliberately violated Palermo and CFT and refused to accept FATF in a bid to continue to finance terrorism and belligerence and circumvent the sanctions,” added Mrs. Rajavi.

The NCRI President-elect underscored that terrorism and warmongering are indispensable to this regime and critical to its survival. It will never abandon financing terrorism and money laundering. Nor will it never submit to financial transparency. Trade with this regime does not serve the interests of the Iranian people and only provides fuel to the mullahs’ machinery of suppression and terrorism.