International

FATF places Iran on black list

It failed to comply with global anti-terrorism financing norms

An international agency placed Iran on its black list on Friday after it failed to comply with international anti-terrorism financing norms, a move that will deepen the country’s isolation from financial markets.

The decision came after three years of warnings from the Paris-based Financial Action Task Force (FATF), urging the Islamic Republic to either enact terrorist financing conventions or see its reprieve from the black list lifted and some counter-measures imposed.

“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,” the group’s 39 members said.

These would entail more scrutiny of transactions with Iran, tougher external auditing of financing firms operating in the country and extra pressure on the few foreign banks and businesses still dealing with Iran. “The consequence of (Iran’s) inaction is higher costs of borrowing and isolation from the financial system,” a Western diplomat told Reuters.

However, the FATF appeared to leave the door open for some engagement with Iran saying in its statement: “Countries should also be able to apply countermeasures independently of any call by the FATF to do so.”

“It’s a middle solution. A sort of a fudge to leave the door open for the Iranians,” said one of the diplomats.

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Printable version | Apr 10, 2020 12:45:27 PM | https://www.thehindu.com/news/international/fatf-places-iran-on-black-list/article30883377.ece

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