As Iran claims a diplomatic victory, int'l terrorism watchdog demurs

In a statement, the Financial Action Task Force noted the progress of the legislative efforts by Iranian officials.

October 21, 2018 14:54
2 minute read.
Iranian armed forces members march during the annual military parade in Tehran

Iranian armed forces members march during the annual military parade in Tehran, Iran September 22, 2018. (photo credit: TASNIM NEWS AGENCY/HANDOUT VIA REUTERS)


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As the international legal battle over US sanctions against Iran continues, Iranian Foreign Ministry spokesperson Bahram Qassemi described a financial watchdog's decision to extend the deadline for Iran's compliance with terrorism financing rules as a diplomatic victory, the semi-official Iranian Student News Service reported Sunday.

The Financial Action Task Force's (FATF) proposed reforms on money laundering and terrorism financing were set to bring Iran in line with global norms. Iran's October 2018 deadline was extended to February 2019, according to the Iranian media outlet.

Qassemi described it as a diplomatic achievement for Iran in the face of widespread US efforts to sanction the Islamic Republic.

In a statement, Qassemi said that a majority of FATF members were not influenced by American political pressure, abetted by Israel and Saudi Arabia. Sanctions reimposed on Iran following US President Donald Trump's withdrawal from the 2015 nuclear agreement target financial institutions that deal in or hold Iran's currency.

However, in a statement earlier this year, FAFT pronounced that the organization is "disappointed with Iran's failure to implement its action plan to address significant AML/CFT deficiencies." FAFT "urgently expects Iran to proceed swiftly in the reform path to ensure that it addresses al of the remaining items in its action plan," the statement said.

FAFT is an inter-governmental body that aims to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

FAFT is tasked with monitoring countries' compliance with the Terrorist Financing Convention, which obligates states to criminalize not only the financing of terrorist acts but also the financing of terrorist organization and individual terrorists, even in the absence of a link to a specific act or acts.

In a statement, FATF noted the progress of the legislative efforts by Iranian officials, but claimed that, as with any country, FAFT can only consider fully enacted legislation.

Among a number of items that FATF noted Iran still need to fully address were "adequately criminalizing terrorist financing, including by removing the exemption for designated groups 'attempting to end foreign occupation, colonialism and racism.'"

Qassemi omitted parts of the FAFT statement that said Iran's measures have not fully met expectations. He added that FAFT should avoid political motivations and pay attention to technical dimensions.

“Iran does not need more time to complete its action plan. That’s not the problem. Instead, it needs to make a strategic decision to - unconditionally - abandon financing terrorism. There has been no change to the risks Iran poses to the international financial system and won’t until Iran changes course, regardless of what laws it passes.” said Toby Dershowitz, Senior Vice President at the Foundation for Defense of Democracies, a non-partisan think tank focusing on national security.

Reuters contributed to this report.

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