Money-Laundering Standards Body Suspends Some Iran Restrictions By Samuel Rubenfeld
http://blogs.wsj.com/riskandcompliance/2016/06/24/money-laundering-standards-body-suspends-some-iran-restrictions/
The Financial Action Task Force, an international anti-money-laundering standards body, said Friday it would suspend some of its restrictions against Iran for a year to monitor Tehran’s progress implementing changes to its regulatory regime.
The White House has been pushing to ease the path for business into Iran since the implementation of the nuclear agreement, and removing Iran from the FATF blacklist would aid in that effort. Critics, however, are pushing back, saying Iran’s conduct hasn’t changed since the deal was implemented, citing, among other things, Iran’s support for groups such as Hezbollah.
The FATF, following its plenary session in South Korea this week, said it welcomed Iran’s adoption of, and political commitment to, an action plan to address deficiencies in its anti-money laundering and counter-terrorist financing policies, as well as Iran’s decision to seek assistance with implementation. Iran will remain on the blacklist until the full implementation is complete, and if Iran fails to demonstrate “sufficient progress” at the end of the yearlong suspension, the restrictions will be reimposed, the FATF said, calling attention to Iran’s issues with terrorism financing, without specifying what those issues were.
Among other moves in recent months, Iran ordered the implementation of an anti-terror financing law and it joined the Eurasian Group, an FATF-associate body, as an observer. If Iran meets its commitments, the FATF said it would “consider next steps.” In the meantime, the FATF called for members to tell their country’s financial financial institutions to “apply enhanced due diligence to business relationships and transactions,” using a risk-based approach, with people and companies in Iran.
“The FATF will continue to engage with Iran and closely monitor its progress,” it said in a statement.
Countries that fail to implement FATF’s standards on anti-money laundering and counter-terrorist financing policy run the risk of being labeled as high-risk or uncooperative jurisdictions, making it more costly and difficult for those nations to transact with the banking systems of FATF member states.
Iran has lobbied for removal from the FATF blacklist, seeing it as a roadblock to investment from foreign companies since the implementation of the nuclear agreement with global powers. Global banks have cited the FATF’s statements on Iran as one reason to hold back on investment.
North Korea and Iran are the only countries labeled as “high-risk or uncooperative jurisdictions” by the FATF. In February, the FATF said in its statement it was “particularly and exceptionally concerned” about Iran’s failures to address terrorism-financing issues, saying it poses a serious threat to the integrity of the global financial system. CONTINUE AT SITE
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