Statement on Financial Action Task Force Decision on Iran

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June 24, 2016
Statement on Financial Action Task Force Decision on Iran

Today the Financial Action Task Force (FATF) reaffirmed its concern about Iran’s terrorist finance activities, and cautioned nations to apply enhanced due diligence to transactions with Iran. But FATF stunningly decided to suspend its call for countermeasures against Iran for a 12-month period, expressing hope that Iran’s performance will improve.
 
FATF’s decision is dangerous. Just last month, the State Department found that Iran remains the world’s foremost state sponsor of terrorism. Iran’s pledge to FATF to improve its performance explicitly exempts organizations like Hezbollah and Hamas—which Iran continues to fund. Even if one imagined Iran would give up funding these organizations, Iran’s pledge to FATF remains only a promise. The net result is that FATF has dropped countermeasures against Iran in exchange for a deficient pledge by the world’s leading sponsor of terror.     
 
Permitting Iran’s further reintegration into the global banking system absent significant improvement in its behavior will endanger the system’s security and confer unearned legitimacy on Tehran.
 
The United States must continue warning international banks about the dangers of conducting business with Iran, and with its Revolutionary Guard Corps (IRGC). The IRGC remains under U.S. sanctions, and any bank conducting business with the group risks losing access to the U.S. financial system.