Iran’s FATF debate heats up as nuclear deal remains in limbo

Tehran, Iran – Top-level officials in Iran are once more publicly discussing contentious anti-money-laundering and anti-“terrorism financing” legislation that appears to be linked to the fate of the country’s nuclear deal.

In a televised speech on Wednesday, President Hassan Rouhani advocated for the ratification of two remaining bills to complete Iran’s action plan with the Paris-based Financial Action Task Force (FATF).

The FATF is a global intergovernmental organisation tasked with devising standards on combating money laundering and “terrorism financing”.

Iran and North Korea are the only two countries on its blacklist.

“All countries have adopted [FATF standards]. Right and left. West and east. If it’s something bad then why has everybody gone for it?” the president said.

“This is no joke. This is the people’s right. This is people’s lives. This is connected with the pockets of every single person.”

Rouhani also said that while the adoption of the two bills may not solve all the country’s problems, but officials who opposed them should consider how they would explain to the people how not ratifying them will hurt the country.

On Tuesday, more than 200 members of Iran’s conservative parliament signed a statement critical of the FATF legislation, saying it would “complete the puzzle of sanctions by the West and US”.

As part of Iran’s action plan with the FATF, initially agreed upon more than six years ago, the country had to finalise four pieces of legislation.

Two were passed by a reformist-heavy parliament and approved by the powerful constitutional vetting body, the Guardian Council, in 2018 and 2019.

But disagreement between the parliament and the council over the two remaining bills meant that they were handed to the arbitration body, the Expediency Council, where they remained dormant for about two years.

Nuclear deal link

In December 2020, as hopes for restoring Iran’s 2015 nuclear deal with world powers were on the rise, Rouhani wrote a letter to Supreme Leader Ayatollah Ali Khamenei, who agreed to revive talks on the bills at the Expediency Council.

The council was supposed to announce its final vote on the legislation before the end of the current Iranian calendar year on March 20, but its secretary Mohsen Rezaei said on Wednesday the vote had been deferred to after the new year holidays.

Rezaei told a news conference that the council had been asked to approve the legislation by the government on the grounds that Iran should be in good standing with the FATF in the face of an imminent lifting of US sanctions in order to revitalise its international banking ties.

“Some of the men [at the council] said: ‘Give us a date, when will the sanctions be lifted? If it’s in [April], then we will wait until then and we will discuss the bills here and give a vote of approval when they lift the sanctions,'” he said.

The current US sanctions on Iran were imposed by former US President Donald Trump who in 2018 unilaterally withdrew from the nuclear deal between Iran and world powers.

President Joe Biden has promised to restore the deal, admitting that Trump’s “maximum pressure” campaign has failed, but has so far refused to lift any sanctions.

Rezaei, a former commander-in-chief of the Islamic Revolutionary Guard Corps, said he personally believes the council will reject the bills.

Mohammad Reza Bahonar, a member of the Expediency Council who is in favour of passing the bills, said on Tuesday he believes the bills would “most likely” be ratified, but with changes that would be based on Iran’s conditions.

“Our problem regarding this is that some movements in the world are considered as terrorism that we recognise as freedom fighters,” he said, pointing out Iran’s support for movements in Palestine against Israel and in Yemen fighting a Saudi Arabia-led coalition.