26 Feb 2019
Iran will have another three months to comply with a plan to improve its anti-money laundering and counterterrorism financing regime after failing to meet goals set for earlier this month, an intergovernmental watchdog said.
The Paris-based Financial Action Task Force (FATF) on Friday expressed “disappointment” that the Iranian government had failed to strengthen its customer due diligence requirements for banks and adequately criminalize the financing of extremist groups, including by identifying and seizing funds intended for terrorist organizations.
The FATF, which sets standards for fighting money laundering and terror funding for 36 member-states, also noted that Iran has yet to ensure that financial institutions verify originator and beneficiary information in wire transfers and report suspected terrorist financing in regulatory filings.
Iran’s compliance with FATF standards is widely perceived as a crucial step for the country to better integrate into the global economy following the 2015 finalization of an accord to suspend its nuclear program in exchange for the relaxation of sanctions. The United States withdrew from the agreement last year but did not reimpose so-called “secondary sanctions” on other nations that do business with Iran.
Under an action plan adopted in June 2016, Iran agreed to comply with FATF recommendations by January 2018 in return for the intergovernmental group suspending its call for member-states to take countermeasures against the country.
“If by June 2019, Iran does not enact the remaining legislation in line with FATF standards, then the FATF will require increased supervisory examination for branches and subsidiaries of financial institutions based in Iran,” the Paris-based group said at the conclusion of its latest plenary meeting.
Barring full compliance with the FATF action plan, member-states and other nations should continue to urge financial institutions to apply enhanced due diligence measures to business deals and transactions linked to Iran, the organization said.
Iran’s latest deadline could be its last before countermeasures are reimposed, according to a U.S. Treasury Department official cited by Reuters.
“The action plan is overdue and we expect it to be implemented without delay,” the official said.
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