Gives Iran Until February to Take Further Steps:

FATF Rejects Iranian Parliament’s Legislation

Date: 19 October 2018 - 21:16

News ID: ۵۸۶۹۶

PARIS (Dispatches) -- The international group that monitors money laundering worldwide said on Friday Iran had until February to complete reforms that it claims would bring it into line with global norms or face consequences.
The Paris-based Financial Action Task Force said after a meeting of its members that it was disappointed that Tehran had acted on only nine out of 10 of its guidelines despite pledges to make the grade.
"We expect Iran to move swiftly to implement the commitments that it undertook at a high level so long ago,” said Marshall Billingslea, the U.S. assistant Treasury Secretary for terrorist financing, after chairing an FATF meeting.
"In line with that, we expect that it will have adopted all of these measures by February. If by February 2019 Iran has not yet done so, then we will take further steps,” he said.
In the mean time, the FATF said it had decided to continue suspending counter-measures, which can go as far as limiting or even banning transactions with a country.
Iran’s parliament approved some new measures against funding terrorism earlier this month. But FATF said that it could only consider fully enacted legislation.
Members of FATF had already given Tehran until this month to purportedly bring its laws against money-laundering and funding of terrorism up to its guidelines.
Otherwise, Iran risked being returned to a blacklist of non-compliant countries that makes foreign investors and banks reluctant to deal with it.
For years, Tehran has been implementing anti-money laundering (AML) and combating the financing of terrorism (CFT) standards set by the FATF, but the group says it is not satisfied with the measures.
Domestic proponents of the measures are pressing Iran to go the extra mile, but critics argue that membership in the group will only make the country vulnerable to outside meddling.
They say Iran's implementation of FATF standards so far has not only failed to attract investment, but it has also exposed various institutions to extraterritorial regulations and penalties.
Britain, France and Germany say they are trying to keep some financial channels open to Iran after the United States pulled out of a 2015 nuclear deal in May and re-imposed sanctions.
However, Israeli reports said the United States is planning to impose further sanctions on Iran.
The strategy, they said, would stress political and diplomatic efforts to oust Iran out of Syria by weakening it economically. It would pause reconstruction assistance from areas where Iranian and Russian forces are present, three people familiar with the plan told Zionist media outlets. An example of such an area is Aleppo, a terrorist stronghold until the Syrian army liberated it back in 2016.
Additionally, the United States would impose sanctions on Russian and Iranian firms working on reconstruction in Syria.
"There’s a real opportunity for the U.S. and its allies to make the Iranian regime pay for its continued occupation of Syria,” the so-called Foundation for Defense of Democracies Mark Dubowitz told NBC News.
The development follows the U.S. sanctioning of 22 businesses on Tuesday.
France's foreign ministry said on Thursday a so-called Special Purpose Vehicle (SPV) that the European Union is considering creating to enable trade with Iran could be used more broadly to help the bloc avoid the extraterritorial reach of U.S. law.
EU foreign policy chief Federica Mogherini said in September that the new mechanism would be in place by November as it seeks to keep trade flowing even though new U.S. sanctions on Tehran will take effect from Nov. 4.
The idea is to circumvent the sanctions under which Washington can cut off from the U.S. financial system any bank that facilitates an oil transaction with Iran.
Until now, the SPV appeared to focus solely on Iran. But in a reply to Reuters, the French foreign ministry said the idea was for the SPV to go beyond Iran and cover a wider range of EU trade.
"The ongoing work on the special purpose vehicle should facilitate financial transactions for companies wishing to maintain trade relations with Iran, in accordance with European law," Foreign Ministry spokeswoman Agnes Von der Muhll said.
"It aims to create an economic sovereignty tool for the European Union beyond this one case. It is therefore a long-term plan that will protect European companies in the future from the effect of illegal extraterritorial sanctions."
Many diplomats and analysts have expressed doubt over whether such a mechanism could ultimately thwart U.S. sanctions given that the United States could amend its sanctions laws to target the SPV itself.
The U.S. special envoy on Iran, Brian Hook, told reporters on Monday that European efforts would struggle to gain traction given there was little demand after more than 100 companies had pulled out of Iran.
With the flood of companies leaving in mind, the European Union’s focus has shifted to the longer term to try to overcome a perception that European policy is held hostage by the U.S. treasury.
Commission President Jean-Claude Juncker has proposed promoting the euro as a global currency to challenge the dollar, potentially allowing oil to be priced on world markets in euros.