Baku, Azerbaijan, March 4
By Khalid Kazimov – Trend:
Iranian President Hassan Rouhani says that the country’s banks have failed to keep pace with the international financial systems over the past years, calling for transparency in banks and financial institutions.
“Banks and financial institutions must all become transparent… Transparency is in the favor of all of us,” he told the 57th annual meeting of the General Assembly of the Central Bank of Iran on March 4.
Saying that the transparency would protect the long-term interests of the nation, he urged the Iranian bankers to bring transparency to the country’s banking system.
The president further added that the country’s banks must take measures to meet the both purposes, becoming modern and observing the Islamic regulations.
The Financial Action Task Force (FATF) in a late February announcement said that the Islamic Republic risks new penalties in June if it doesn’t bolster oversight of terrorism financing and money laundering within its borders.
The official announcement of the organization reads that in June 2016, the FATF welcomed Iran’s high-level political commitment to address its strategic AML/CFT (anti-money laundering and combating the financing of terrorism) deficiencies, and its decision to seek technical assistance in the implementation of the Action Plan. Given that Iran provided that political commitment and the relevant steps it has taken, the FATF decided in November 2017 to continue the suspension of counter-measures.
Since November 2017 Iran has established a cash declaration regime and introduced draft amendments to its AML and CFT laws. However, Iran’s action plan has now expired with a majority of the action items remaining incomplete. Iran should fully address its remaining action items, including by: (1) adequately criminalising terrorist financing, including by removing the exemption for designated groups “attempting to end foreign occupation, colonialism and racism”; (2) identifying and freezing terrorist assets in line with the relevant United Nations Security Council resolutions; (3) ensuring an adequate and enforceable customer due diligence regime; (4) ensuring the full independence of the Financial Intelligence Unit and requiring the submission of STRs for attempted transactions; (5) demonstrating how authorities are identifying and sanctioning unlicensed money/value transfer service providers; (6) ratifying and implementing the Palermo and TF Conventions and clarifying the capability to provide mutual legal assistance; (7) ensuring that financial institutions verify that wire transfers contain complete originator and beneficiary information; (8) establishing a broader range of penalties for violations of the ML offense; and (9) ensuring adequate legislation and procedures to provide for confiscation of property of corresponding value.
Given that Iran has draft legislation currently before Parliament, the FATF decided at its meeting in February to continue the suspension of counter-measures.
The FATF urgently expects Iran to proceed swiftly in the reform path to ensure that it addresses all of the remaining items in its Action Plan by completing and implementing the necessary AML/CFT reforms, in particular passing the necessary legislation.
Iran will remain on the FATF Public Statement until the full Action Plan has been completed. Until Iran implements the measures required to address the deficiencies identified in the Action Plan, the FATF will remain concerned with the terrorist financing risk emanating from Iran and the threat this poses to the international financial system.