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EghtesadOnline: The intergovernmental Financial Action Task Force convenes in Paris this week for its plenary meeting. Among other things, it will look into Iran's progress with the Action Plan, the anti-money laundering body says is necessary for Iran to fulfill if it wants to be removed from the list countries with money laundering and financing of terrorism risks.

The FATF decided at a meeting in October 2018 to continue the suspension of counter-measures against Iran, but said by February 2019 it expects Iran to pass legislation in line with FATF standards. Failing to do so, the FATF said, it will take further steps to protect against the risks emanating from deficiencies in Iran’s AML/CFT regime. Out of the four FATF bills, two have become law and the remaining two have hit a wall. 

In an interview with the Financial Tribune, Hossein Gharibi, assistant foreign minister and an AML/CFT expert said while Iran has made steady progress in this sphere despite the limited timeline, part of the delay has to do with the fact that Iran is committed to implementing real and tangible reforms instead of making "decorative changes."  

According to Financial Tribune, it is the full text of the interview: 

Could you explain Iran's progress in AML/CFT after the extension of the suspension of FATF countermeasures in October.


Gharibi: Ever since Iran made its commitment to fully implement the Action Plan in June 2016, all relevant bodies in the government in cooperation with the judiciary and Majlis have made their utmost efforts to put into action every item of the Plan. 

It was indeed a difficult task, particularly for the Anti-Money Laundering High Council, its Financial Intelligence Unit and the Central Bank of Iran to address all items on the plan in limited time frame. Hopefully, the work has made steady progress. 

As is known, four bills were sent to the parliament by the Cabinet. All four were thoroughly discussed in the technical commissions and the Majlis plenary session and were approved. 

The Countering Financing of Terrorism Act was finalized last August and the Anti Money Laundering Act was signed into law by the president last month. The Expediency Council, which is the final arbiter as per the Constitution,  has considered accession to the Palermo Convention. This to me is a huge progress bearing in mind the workload ahead of the government that includes capacity building and, most importantly, a nationwide awareness campaign to make every news agency and the people sensitive to countering financial crimes. This indeed is a big achievement.                      


What are the strong and weak points for Iran when the FATF meets in February?


The weak point of course is that some members expected that all four bills would be finalized within the extended time. It seems we need more time. However, given the objectives that both Iran and the FATF are pursuing, what is important is the quality of actions to counter money laundering and terrorist financing. 

Today every bank and financial institution [in Iran] has a functioning compliance department. Some countries passed laws and implemented mechanisms in a few months. But there are still a lot of loopholes and risks emanating from their system(s) because they have simply adorned it with new laws without efficient domestic mechanism. 

This is exactly the strong point in Iran’s case since the majority of our people, media, business community, MPs, government officials and public institutions are widely involved. It has been a national campaign to promote rule of law and genuinely fight corruption and financial crime. We have two strong domestic laws that are well understood by the people.        


What is your view of the outcome of the FATF  February session on Iran? 


It is logical that more time is needed to finalize the current process. This is not something unprecedented. Syria implemented all items on its action plan in 2012. Since then, it has been waiting for on site visit by FATF to officially normalize its situation. 

The Iranian government, President Hassan Rouhani, Foreign Minister Zarif, the economy minister, CBI governor, intelligence agencies and other relevant law enforcement agencies are involved and committed to implementing the Action Plan. When FATF members see such strong resolve and the achievements, they will see the wisdom of encouraging the existing path of development rather than stopping it.        

Do you think the recent measures Iran has taken (including amendment to the AML law) are enough to satisfy FATF members?


The two remaining conventions are merely two items. But the two ratified amendments cover a wide range. Meanwhile, we wanted a strong and clear supervisory clause for institutions like the central bank to have authority to oversee the work of all units under their control. A new amendment has been worked out in the government and sent to the parliament. Its adoption will cover the deficiency that might be felt by some experts. 

I don’t see other major deficiencies. We cannot  deviate from the constitutional process when dealing with a particular law. The end goal of this practice is very important and I am sure Iran has done a great job in fighting money laundering and terrorist financing.       

Are the troubles Iran is taking to meet FATF demands really worth compared to the benefits it could get if removed from the list of non-cooperative countries? 


I don’t see the standardization process as being “trouble”, neither do I see it as concessions to others. Such efforts take time and energy. It has been a big reform process for Iran over the past 12 years with many institutions involved. We started to engage in this process because, first of all, our law enforcement agencies, banks and our judicial system felt it as a necessary reform to fight financial crime. On the other hand, I must say that we strongly oppose categorization of countries as black, white or grey. 

In such matters politics always influences technical procedures. For many Iranians, it is a legitimate question as to why Iran was labeled as “non-cooperative” at a time when Resolution 1929, as a strong sanctioning instrument, was adopted by the UN Security Council. 

There are many other similar questions that I don’t want to go into. So while we reject the FATF labeling states, we believe that we should take all efforts to show that we have a strong  and effective system to fight financial crime. 

Could embracing FATF standards create more hurdles for Iran as opponents of the measures claim? 


This is something serious. We have said that no country should facilitate the Trump administration’s unilateral and illegal sanctions. The US broke its UN Charter obligation and withdrew from the nuclear deal which is an integral part of UNSC Resolution 2231. The US not only violated its obligations under the UN resolution but has also encouraged others to follow suit. 

Fortunately, the majority of UN members have condemned this unilateral move. So it is clear that we, as the victim of such sanctions, will never do anything to facilitate them. Other states also have similar concerns. Whatever we do, including in cooperation with our partners to implement FATF standards, has a straight and unambiguous condition: it should in no way help the sanctions. 


Des the US presidency of FATF and the fact that Israel has also joined the group put Iran at some disadvantage? 


The US and its few allies have spared no effort at any international forums to pressure Iran and its people. We have four decades of experience of how to counter them and redirect pressure back to themselves. This is why many hardliners in the US hate international organizations, because we have been able to form groups of like-minded nations to stop their abuse of international organizations and embarrass them over their hostile policies. Regarding this case, we continue to pursue our agenda in tandem with our national interest. 


Iran Financial Action Task Force anti-money laundering financing of terrorism action plan CFT AML Measures Hossein Gharibi