Iran is expected to be sanctioned by the Financial Action Task Force, for financial terrorism, the WSJ reported on February 20th.
The designation will add to the economic trouble the country is undergoing from the United States’s “maximum pressure” campaign against the “Iranian regime”.
Another country that’s blacklisted by the Paris-based organization is North Korea.
European countries have not joined the U.S. in the campaign but have now signaled support for the Financial Action Task Force’s new measure.
The task force comprises 39 countries and organizations and was formed to penalize money laundering and the financing of terrorist and criminal organizations.
Representatives of the member countries have been meeting this week and will hold a full session on February 21st to finalize the decision on Iran.
“Iran has failed to fulfill its commitments,” Secretary of State Mike Pompeo said in a statement before the task force’s meeting. “It is past time for Iran to complete the action plan it agreed to in June 2016 or face the full reimposition of countermeasures.”
Essentially, with Pompeo there, it means that the decision is almost entirely a result of US pressure within the task force.
“The United States was pushing for the toughest position, while other countries like China and Russia preferred something more flexible,” said a European official, cited by the NYT. “The Europeans were looking for something in between.”
The decision would include Iran under the “call for action” designation, which North Korea is also subject to. The sanctions would put further restrictions on Iranian businesses and reviews of financial transactions tied to the country.
It would also ban all foreign banks from opening offices in Iran, as well as Iranian banks from opening foreign branches.
Non-compliance with the requirements of the Financial Action Task Force could result in the closure of all Iranian bank accounts around the world, Mahmoud Akbari, an expert on international relations said.
Essentially, all accounts of Iranians that weren’t affected by the US sanctions would now also be affected by a separate set.
“Despite the US sanctions, some countries have kept the governmental bank accounts as well as the accounts of Iranian citizens intact,” but the Paris-based financial crime watchdog could ask member states to apply countermeasures if it decides to blacklist Iran in its ongoing meeting.
Amendments to its Counter-Terrorist Financing and Anti-Money Laundering acts have already been enacted in Iran, but the bills to ratify the Palermo (Convention against Transnational Organized Crime) and Terrorist Financing conventions have been passed by the parliament and but not yet endorsed by higher authorities, namely the Guardians Council and the Expediency Council.
In October 2019, the global organization gave Tehran until February 2020 to comply with the taskforce’s provisions before sanctions are imposed.
Akbari said, “The situation is in favor of Iran’s arch-enemies, the US and Israel, which want Iran to surrender under tremendous economic pressure.”
Iran could potentially still avoid the sanctions, but it doesn’t appear as if it plans to.
“Time is moving fast, but a last-minute reconsideration by the Expediency Council [to clear the way for] enacting the remaining two amendments can avert further economic pressure,” he said.
Iranian Foreign Minister Mohammad Javad Zarif this week appeared resigned to the FATF blacklisting, accusing the United States using its maximum pressure campaign to exert influence at the FATF.
Iran was removed from the body’s financial blacklist in 2016 with the expectation that it would adopt further anti-terrorism financial measures. Since June 2019, the FATF has gradually re-imposed discrete countermeasures on the Islamic Republic—first requiring increased supervisory examination of branches of Iranian financial institutions and then introducing enhanced relevant reporting mechanisms and external audit requirements—coupled with threats to proscribe the Iranian financial system.
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