MESOP NEWS BACKGROUNDER: FINANCIAL ACTIONN TASK FORCE & THE MULLAHS The FATF Keeps Iran on Blacklist While Ignoring Proliferation Finance Threat
EAST KURDISTAN (IRAN) – February 23, 2018 – At its plenary meeting in Paris this week, the Financial Action Task Force (FATF) decided to maintain Iran’s status as a high-risk jurisdiction for money laundering and terrorist financing, while continuing to waive the most severe penalties for this listing. The 38-member body sets global standards on how to combat these threats to the international financial system, through a series of recommended measures and public warnings about doing business with high risk countries.
Iran has been included on the FATF’s “blacklist” since 2008. In today’s public statement, the FATF determined that the steps taken by Iran since 2016, following the implementation of the nuclear agreement, are not sufficient to merit a change in this status. According to today’s statement, the FATF “urgently expects Iran to proceed swiftly in the reform path” by addressing remaining deficiencies in its laws against money laundering and terrorist financing. For the first time, the FATF publicly detailed these deficiencies, notably not “adequately criminalizing terrorist financing.” The body warned that it would take further steps at its June meeting, “depending upon Iran’s progress.”
Notably absent from this and previous FATF public statements is any mention of the threat to the international financial system posed by proliferation in and from Iran. This threat has not disappeared as a result of the nuclear agreement. While the immediate threat posed by Iran’s nuclear program has been reduced, it quickly could reemerge if the agreement falls apart. Meanwhile, Iran’s expansive ballistic missile program, which can serve as a means of delivering nuclear weapons, remains subject to international sanctions and to more stringent national sanctions. In its ongoing evaluation of the risk posed by Iran to the global financial system, the FATF should not lose sight of proliferation, both the proliferation threat still posed by Iran and the risk that Iran continues to support proliferation in other countries, notably North Korea.