Iran Fails to Meet FATF Guidelines on Money Laundering and Terrorist Financing
The Financial Action Task Force (FATF) has recently evaluated Iran’s implementation of anti-money laundering and counter-terrorism financing measures, yielding a mixed assessment. While the country has made significant progress in some areas, it still falls short in others.
Areas of Compliance
Iran was found to be largely compliant with FATF recommendations regarding:
- Assessing risk and applying a risk-based approach
- National cooperation and coordination
- Money laundering offence
- Confiscation and provisional measures
- Targeted financial sanctions related to terrorism and terrorist financing
- Targeted financial sanctions related to proliferation
Areas of Non-Compliance
However, Iran was only partially compliant with regards to the terrorist financing offence, and non-compliant in several areas including:
- Regulation and supervision of DNFBPs (Designated Non-Financial Businesses and Professions)
- Transparency and beneficial ownership of legal persons and arrangements
- Powers of supervisors
Additionally, Iran received poor ratings for its implementation of measures to prevent money laundering and terrorist financing through:
- New technologies
- Wire transfers
- Reliance on third parties
Iran was also found to be non-compliant with regards to reporting suspicious transactions, and partially compliant in several areas including:
- Customer due diligence
- Record keeping
- Internal controls
Recommendations for Improvement
The FATF report highlighted several areas where Iran needs to improve its implementation of anti-money laundering and counter-terrorism financing measures, including:
- Strengthening regulations and supervision of financial institutions and DNFBPs
- Improving transparency and beneficial ownership requirements
- Enhancing international cooperation in areas such as mutual legal assistance and extradition
Consequences for Iran’s Financial Sector and Reputation
Iran’s failure to meet the FATF guidelines has significant implications for its financial sector and reputation on the global stage. It is essential that Iran takes swift action to address these deficiencies and demonstrate its commitment to combating money laundering and terrorist financing.
The FATF report provides a roadmap for Iran to improve its anti-money laundering and counter-terrorism financing measures, and it is crucial that the country implements these recommendations in order to regain international trust and avoid any potential sanctions.