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Global Dirty Money Watchdog Places Iran On Blacklist: What Will Be The Consequence? – OpEd

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The FATF has officially blacklisted the Iranian regime for money laundering and terrorism financing. Reuters reported that the World watchdog for Money Laundering blacklisted the Iranian regime on Friday after it failed to comply with international anti-terrorism financial criteria. The decision comes after three years of warnings from the Paris-based Financial Action Task Force (FATF), which has called on the Tehran regime to enforce financial conventions on terrorism, Reuters said.

FATF said in a statement, referring to the high risk of any deal with the Iranian regime for money laundering and terrorism financing: “In June 2016, the Iranian regime pledged to address its strategic shortcomings in the field of money laundering and terrorist financing.”. In February 2020, the FATF determined that the Iranian regime had not completed this program.

The FATF Statement states: Due to the failure to approve Palermo Conventions and the financing of terrorism by the Iranian regime, this regime will remain blacklisted until it adopts anti-terrorism financing standards.

The FATF Statement continues: The Iranian regime must declare financial terrorism crime and abolish the exemptions for the designated groups; the Iranian regime must identify terrorist assets in accordance with relevant UN Security Council resolutions and freeze them. The Iranian regime must demonstrate that it recognizes and sanctions money laundering for terrorist groups.

However, Iranian authorities have repeatedly stated that such commitments conflict with policies that guarantee the survival of the regime and that accepting it means suicide for the regime.

What could be the consequences of this action?

One of the consequences is that the country’s foreign currency earnings and access to foreign currency resources become more difficult. As a result, the exchange rate rise is accelerating.

February 21, The Wall Street Journal wrote: The Iranian regime’s blacklisting was made after European governments joined the United States. With the Iranian regime blacklisted by the FATF, financial exchanges with this regime will become more difficult, with international banks and financial institutions more likely than ever before to be under surveillance and pressure to counter Iran’s money laundering and terrorism financing.  The Wall Street Journal added: “The Iranian currency Rial is expected to fall against foreign currencies by blacklisting Iran by Special Financial Action Task Force (FATF).”

As a result, with enlisting Iran by FATF now the exchange rate of each USD reached more than 16,000 Tomans in the Iranian currency market.

The inflow of foreign currency into the country is slowing and disrupted, which will naturally raise numerous challenges in the foreign exchange market for the collapsed economy of the Iranian regime.

Foreign companies are much less likely to engage in trade and deal with Iran, and the risk of blocking trade earnings with the Iranian regime increases. It is very clear that these consequences will lead to inflation and further recession in the economy.

It should be noted that the extent to which banks and financial institutions around the world will follow the FATF recommendations is by no means comparable to the era and years before the Iranian regime was blacklisted by the FATF. At that time, countries like China, the United Arab Emirates, Turkey, Russia, and some countries that still maintained their dealings with the Iranian regime had not yet implemented the FATF recommendations seriously. However, now the situation is qualitatively different!

Some suggest that the Iranian regime does not currently trade with other banks because of US sanctions. That said, while much of the Iranian regime’s trade with several banks is underway in China, India, Russia, Iraq, and Turkey, these banks will severely reduce their cooperation with Iran and may even stop totally.  Also, much of the regime’s trade was carried out through money orders or through accounts with names other than the names of officials or well-known companies and companies of the Iranian regime. Now, keep in mind that these accounts will also be closed faster. Accounts of individuals who have in any way been engaged in a clear and transparent exchange with the Iranian regime and its authorities will be investigated or blocked.

While the mullahs have sacrificed the entire economy of the country for warfare and the spread of terrorism and proxy forces, Iran’s entry into the FATF blacklist will make all countries, even countries that have tried, with appeasement policies, commercial, political and regional interests, they must comply with FATF recommendations on dealing with Iran. In simple terms, these recommendations will cause banks and financial institutions in different countries to refuse and stop working with Iranian companies and banks. They also advise companies that deal with the regime to stop working with Iran or close their accounts.

Terrorism and war are an inseparable part of this regime’s existence and its survival. Therefore, it never ceases to fund terrorist groups and money laundering and never promotes financial transparency. Trade with the Iranian regime does not benefit the Iranian people and serves only the repressive and terrorist organs of this regime.

*Perviz S. Khazai:  is a law graduate and former Apprentice diplomat in French Ministry of Foreign Affairs- in IIAP(ENA)Paris, in United Nations in Geneva- In Red Cross International- In Council of Europe in Strasbourg and International Court of Justice in The Hague 1969-1971. He served as an international law expert of foreign affairs in Tehran 1976-1979. He served as the head of the mission and acting ambassador in Norway and Sweden in 1979-1982.


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Perviz S. Khazai

Perviz S. Khazai

Perviz S. Khazai is a law graduate and former Apprentice diplomat in French Ministry of Foreign Affairs in IIAP(ENA) Paris, in United Nations in Geneva, in Red Cross International- In Council of Europe in Strasbourg and International Court of Justice in The Hague 1969-1971. He served as an international law expert of foreign affairs in Tehran 1976-1979. He served as the head of the mission and acting ambassador in Norway and Sweden in 1979-1982. He is now representative of NCRI in northern Europe.

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