Iran's problems piling up due to being on FATF's blacklist

Finance Materials 11 January 2021 11:32 (UTC +04:00)
Iran's problems piling up due to being on FATF's blacklist

BAKU, Azerbaijan, Jan. 11

By Elnur Baghishov – Trend:

Iranian banks' spending has increased by 8-14 percent with the inclusion of Iran in the FATF blacklist, Former Iranian diplomat in the UN, Kurush Ahmadi told Trend.

According to him, because it is on the FATF's blacklist, banks that want to work with Iran are demanding additional costs from the country.

The official added that the countries such as China, Russia and India are members of the FATF, and these countries cannot ignore its conventions.

Ahmadi noted that Iran's blacklisting of the FATF has prompted foreign banks to take very cautious steps regarding products and services that are not on the US sanctions list against Iran.

“Undoubtedly, non-implementation of FATF standards has complicated cooperation with other countries. Moreover, there is no difference between friendly and unfriendly countries. Because all banks cooperate with each other and the activity of banks in the world is the same,” he said.

Ahmadi emphasized that there may be progress in Iran's trade turnover with Iran's withdrawal from the FATF blacklist.

The objectives of FATF are to set standards and promote effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system.

During the recent FATF meeting, Iran has been warned that it may be added to the list of non-cooperative countries within three months if it does not completely fulfill the FATF requirements. Iran fulfilled 37 of 41 FATF requirements. The remaining four requirements refer to the legislative field.

The amendments to the Counter-Terrorist Financing Act, Anti-Money Laundering Act, Convention against Transnational Organized Crime (Palermo), and International Convention for the Suppression of the Financing of Terrorism (CFT) were prepared by the Iranian government and sent to the parliament.

Although the four conventions have been approved and sent to the Expediency Council of Iran, the CFT and Palermo conventions have not yet been ratified by the Council.

FATF was established in 1989 on the initiative of the G7 Group to combat money laundering. FATF has 37 members and its secretariat is in Paris.

Iran was included in the FATF blacklist in 2007. The anti-Tehran steps have been taken since 2009. Thus, the countries were cautious in their financial and banking transactions with Iran.

Taking of reciprocal steps against Iran through diplomatic steps has been postponed since 2016. FATF included Iran into the blacklist again on Feb. 21, 2020.

According to the statistics of the IRICA, Iran exported 75 million tons of goods worth $21.5 billion during the first eight months of the current Iranian year (from March 20 through November 20, 2020). Iran's exports decreased by 19 percent in terms of value and 14 percent in terms of volume compared to the same period last Iranian year.

In addition, Iran imported 21.8 million tons of goods worth $23.1 billion within 8 months of the current Iranian year.

Iran's imports decreased by 18 percent in terms of value and 1 percent in terms of volume compared to the same period last Iranian year.