United States Commends FATF for Re-imposition of Countermeasures on Iran
2020-02-23 | By admin13339
| Article post
MICHAEL R. POMPEO, SECRETARY OF STATE
FEBRUARY 21, 2020
The United States commends the Financial Action Task Force (FATF)’s February 21st call for all jurisdictions to swiftly enact effective countermeasures to protect the international financial system from the terrorist financing threats emanating from Iran. The regime must face consequences for its continued failure to abide by international norms, in particular its inaction in ratifying the Palermo and Terrorist Financing Conventions.
Since Iran’s FATF action plan expired in 2018, Iran has failed to fulfill its commitments to adhere to the FATF’s anti-money laundering and combating the financing of terrorism standards, including ratifying the UN Palermo and Terrorist Financing Conventions. The regime needs to adhere to the basic standards that virtually every other country in the world agrees to. Iran must cease its reckless behavior and act like a normal nation if it wants its isolation to end.
High-risk jurisdictions have significant strategic deficiencies in their regimes to counter money laundering, terrorist financing, and financing of proliferation. For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing (ML/TF/PF) risks emanating from the country. This list is often externally referred to as the “blacklist”. *
In June 2016, Iran committed to addressing its strategic deficiencies. Iran’s action plan expired in January 2018. In February 2020, the FATF noted Iran has not completed the action plan.
In October 2019, the FATF called upon its members and urged all jurisdictions to require increased supervisory examination for branches and subsidiaries of financial institutions based in Iran; introduce enhanced relevant reporting mechanisms or systematic reporting of financial transactions, and require increased external audit requirements for financial groups with respect to any of their branches and subsidiaries located in Iran.
Now, given Iran’s failure to enact the Palermo and Terrorist Financing Conventions in line with the FATF Standards, the FATF fully lifts the suspension of counter-measures and calls on its members and urges all jurisdictions to apply effective counter-measures, in line with Recommendation 19.
Iran will remain on the FATF statement on [High-Risk Jurisdictions Subject to a Call for Action] until the full Action Plan has been completed. If Iran ratifies the Palermo and Terrorist Financing Conventions, in line with the FATF standards, the FATF will decide on the next steps, including whether to suspend countermeasures. Until Iran implements the measures required to address the deficiencies identified with respect to countering terrorism-financing in the Action Plan, the FATF will remain concerned with the terrorist financing risk emanating from Iran and the threat this poses to the international financial system.
In February 2020, the FATF noted that there are still items not completed and Iran should fully address: (1) adequately criminalizing terrorist financing, including by removing the exemption for designated groups “attempting to end foreign occupation, colonialism and racism”; (2) identifying and freezing terrorist assets in line with the relevant United Nations Security Council resolutions; (3) ensuring an adequate and enforceable customer due diligence regime; (4) demonstrating how authorities are identifying and sanctioning unlicensed money/value transfer service providers; (5) ratifying and implementing the Palermo and TF Conventions and clarifying the capability to provide mutual legal assistance; and (6) ensuring that financial institutions verify that wire transfers contain complete originator and beneficiary information.