Wed, 17 Jul 2019

US, Other Nations Agree to Toughen Supervision of Iran's Banks

Voice of America
24 Jun 2019, 11:53 GMT+10

This article originated in VOA's Persian service.

The United States and more than 30 other nations belonging to a group that seeks to protect the global financial system have agreed to toughen their supervision of Iran's financial institutions.

In a statement released Friday after a meeting of the Financial Action Task Force (FATF) in Orlando, Fla., the 36 governments plus the Gulf Cooperation Council and European Commission said they have agreed on a requirement for "increased supervisory examination for branches and subsidiaries of financial institutions based in Iran."

A warning to Iran

The FATF said it was disappointed that Iran has not yet taken a series of actions to address concerns about money laundering and financing of terrorism in the Islamic Republic. The group also warned that it will reimpose countermeasures on Iran if it does not enact the Palermo and Terrorist Financing Conventions in line with FATF standards by October.

The threatened countermeasures include "enhanced relevant reporting mechanisms; systematic reporting of financial transactions; and increased external audit requirements for financial groups with respect to any of their branches and subsidiaries located in Iran."

The FATF suspended those measures in June 2016 when Tehran agreed to address anti-money laundering and counterterror financing (AML/CFT) deficiencies in its banking system. In its Friday statement, the group said it will continue suspending the countermeasures in recognition of progress made by Iran, including its passage of an Anti-Money Laundering Act.

US welcomes decision

In a Friday speech to the Orlando gathering, marking the final plenary of the U.S. presidency of the FATF, Treasury Secretary Steven Mnuchin welcomed the group's decision to toughen supervision of Iranian financial institutions and its threat to reimpose countermeasures if Iran fails to act by October. Mnuchin said those steps were a response to what he called "Iran's willful failure to address its systemic money laundering and terrorist financing deficiencies."

A Fox Business report said a senior U.S. Treasury official told the network that President Donald Trump was referring to the FATF moves in a Friday tweet announcing additional U.S. sanctions against Iran.

U.S. advocacy group United Against Nuclear Iran (UANI) commended the FATF decisions but said the group needs to do much more, citing Iran's "failure" for three years to fully comply with an FATF action plan.

"Countermeasures need to be reimposed to protect the integrity of the international financial system. As long as Iran chooses to remain an extremist regime, it should remain closed for business," said UANI's chief executive Mark Wallace, a former U.S. ambassador to the U.N., in a Friday statement.

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