Financial watchdog urges Iran to crack down on money laundering

3 Jul 18

Iran must complete money-laundering reforms by October, bringing them in line with global standards, an international watchdog has demanded. 

The country has been trying to implement standards set by the Financial Action Task Force, which monitors government anti-money laundering (AML) and counter financing of terrorism (CFT) regimes, in the hope that it would be more attractive to foreign investors.

But, following a meeting in Paris, the Financial Action Task Force said it was “disappointed with Iran’s failure to implement its action plan to address its significant AML/CFT deficiencies”.

It urged Iran to implement the reforms in full compliance with the global standards by October 2018.

“Otherwise, the Financial Action Task Force will decide upon appropriate and necessary actions at that time,” the statement said.

These “actions” could worsen Iran’s financial sector, which is already suffering from the US decision to withdraw from the nuclear accord, which is deterring business investment.

On 20 June, Iran’s supreme leader Ali Khamenei pushed for parliament to pass legislation to combat money laundering under its own criteria.

But foreign businesses have said that a bill with FATF guidelines is more likely to increase investment.

Following the Paris meeting, the group also placed Pakistan back on a terror financing watch list this week, as the country vowed to tighten regulations and follow an action plan to tackle money laundering and terror financing.

The Financial Action Task Force is an inter-governmental group established in 1989.

It exists to set standards and promote effective implementation of regulations for combating money laundering, terrorist financing and other threats to the integrity of the international financial system.

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