Iran Passes Anti-Money Laundering Bill

Published: 08 January 2019

320px-Parliament of Iran 2Parliament of Iran (Source: QSTA, CC BY-SA 3.0)

By Tajna Biscevic

Despite objections by conservatives, Iran passed a long-awaited anti money laundering bill on Saturday, taking the country one step closer to accessing the international financial system.

The new bill brings Iran closer to adherence with standards required by the Financial Action Task Force (FATF), an intergovernmental financial security body combating money laundering, terrorist financing and other threats to the international financial system.

In 2008, the FATF put Iran on its ‘blacklist’ of non-cooperative jurisdictions – countries characterized by an unwillingness to provide international law enforcement officials with information relating to money laundering  but has since suspended Iran’s banned status while the country works on reforms.

After Iran failed to meet an October 2018 deadline, the FATF extended the blacklist suspension and Iran now has until February 2019 to ratify the necessary amendments.

The International Monetary Fund, which assists the FATF in assessing compliance to its standards, has advised the country to adhere to this deadline.

The bill passed Saturday is the second of four amendments that Iran needs to pass to fully adhere to FATF standards.

Iran’s conservative Guardian Council, which vets laws against Islam and the Iranian constitution, rejected the amendment last year. Opponents to Iran’s FATF membership fear approving the bills will prevent Iran from extending financial assistance to groups such as HAMAS and Hezbollah.

However, the Iranian economy continues to be in crisis after a year of US sanctions. Its currency lost more than 60 percent of its value in 2018, and President Hassan Rouhani said that Iran's banking transactions will cost 20 percent more if the FATF bills are not ratified in time.

In 2017, Iran ranked first in the world for highest risk of money laundering, according to the global Basel Anti-Money Laundering (AML) Index, trailed by Afghanistan and West Africa’s Guinea-Bissau.