Iran’s Supreme Leader Ayatollah Ali Khamenei has approved the revival of bills that for years were the subject of political infighting between the country’s moderates and hardliners.
According to Laya Joneydi, Iran’s vice president for legal affairs, President Hassan Rouhani requested that the Expediency Council – Iran’s arbitration body – be tasked with reviewing the legislation, which would bring the country into compliance with the Financial Action Task Force (FATF).
The FATF is a Paris-based global watchdog on anti-money laundering and combatting “terrorism” financing. Iran and North Korea are the only two countries on the FATF blacklist.
Passing the bills is crucial for the establishment of international banking ties, notably with Europe.
Joneydi told the Iran newspaper in an interview published on Monday: “It will exceedingly limit our business and financial transactions, increase the cost of transactions, and affect business growth, employment and economic growth” – if Iran remains on the FATF blacklist.
A reformist-heavy Parliament approved the bills at the end of 2018, but the Guardian Council, the powerful 12-member oversight body that vets legislation, found issues with them.
After a prolonged process, two drafts received Guardian Council approval and passed into law last year, but two remained stuck as the Council refused to approve them.
The Expediency Council was tasked with making a decision on the matter, but it stalled until the bills seemed dead for good.
Advocates for the laws say Iran would hurt itself if it blocks the legislation as the few financial institutions that still deal with the country would blacklist it for fear of falling afoul of international compliance rules.
Opponents say Iran would be further sanctioning itself if it were to divulge financial data and boost transparency.
After abandoning Iran’s 2015 nuclear deal with world powers in May 2018, US President Donald Trump imposed harsh economic sanctions on Iran that have now blacklisted the entire Iranian financial sector.
In February, the Paris-based FATF lifted the suspension of its counter-measures on Iran that was introduced in 2016.
The organisation said Iran will remain on its blacklist until it ratifies the two remaining bills.
“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,” it said.