Facing serious economic problems, Iran’s regime has finally relented and agreed to join the intergovernmental Financial Action Task Force.
The FATF was created in 1989 for coordination of efforts against money laundering. After the 9-11 attacks in 2001, its mandate expanded to include financing of terrorism.
The Rouhani Government — both as part of its policy for greater international links and as a response to the growing economic crisis — has pressed for accession to the FATF. However, until now, it has been blocked by hardline factions, including the Supreme Leader’s office.
Ayatollah Khamenei has objected to the step as an undesirable relationship with an organization including “enemy” powers such as the US. Hardliners also were concerned that FATF standards could hinder Iran’s financial ties to groups such as Lebanon’s Hezbollah, which has been designated by the US as a terrorist organization.
Khamenei said in June that the Majlis should pass domestic laws rather than work with the international system.
But on Saturday the Guardian Council finally approved Parliament’s legislation.
“The amendment bill on combating the financing of terrorism is not in contradiction with the country’s constitution and Shari’a laws,” spokesman Abbas Ali Khadkhodaei said.
The refusal to join the FATF has been Iran’s efforts to build financial arrangements for foreign investment, needed to avoid a further economic downturn amid internal problems and expanding US sanctions. The FATF said in June that Iran had until October to implement reforms or face consequences.
The European Union, while supporting the nuclear deal after US withdrawal in May, has told Iran that accession to the FATF is essential if efforts to maintain and expand trade and investment are to be successful.