FATF terror financing: Iran placed on blacklist, Pakistan ‘grey list’
PARIS, Feb 22: A multinational financial crimes watchdog on Friday faulted Iran for not doing enough to counter a "terrorist financing risk" and announced the reinstatement of punitive measures against the country.
In a statement issued after a meeting in Paris, the Financial Action Task Force (FATF) said it was rescinding a suspension of the measures, granted in 2016, to give Tehran time to work on reforms.
Iran is alone with North Korea on an FATF blacklist, which severely restricts their access to loans and international aid. The agency has 37 nations and two regional organisations as members.
Iran's government has hoped to salvage banking and trade ties after the United States walked out of a landmark 2015 nuclear deal and reimposed crippling unilateral sanctions. The other parties to that deal -- Britain, France, Germany, China and Russia -- have sought to salvage the agreement and maintain trade with Iran, but have called on Tehran to meet the FATF requirements.
Pakistan won an extra four months to meet international anti-terrorism financing norms on Friday when a global dirty money watchdog decided to keep the country off its blacklist for now.
After Pakistan missed multiple previous deadlines, the Financial Action Task Force said it was concerned that Islamabad had again failed to complete an internationally agreed action plan.
"The FATF strongly urges Pakistan to swiftly complete its full action plan by June 2020," the FATF said in a statement issued after a meeting in Paris. "Otherwise, should significant and sustainable progress especially in prosecuting and penalising TF (terrorism financing) not be made by the next Plenary, the FATF will take action."
In a bid to do so, the government drafted amendments to laws aimed at curtailing counter-terrorist financing and money laundering. But it has yet to ratify the two conventions, and the FATF said Iran had further work to do on criminalising terrorist funding, identifying and freezing terrorist assets, and properly regulating wire transfers.
The FATF it would keep Iran on the "high risk jurisdictions" blacklist, and will decide on next steps "if Iran ratifies the Palermo and Terrorist Financing Conventions, in line with the FATF standards."
Counter-measures include audits of Iranian banks and subsidiaries, and stricter oversight of their transactions.
"Until Iran implements the measures required to address the deficiencies identified with respect to countering terrorism financing... 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.
The watchdog also raised the pressure on Pakistan, threatening to put it on its blacklist unless the government completes an anti-terror financing action plan by June.
"Otherwise, should significant and sustainable progress especially in prosecuting and penalising terrorism financing not be made... the FATF will take action," the statement said.
This could include calling on its members to advise their financial institutions "to give special attention to business relations and transactions with Pakistan," a measure that could in effect limit its access to the global banking system.
Regarding North Korea, the FATF expressed "serious concerns with the threat posed by the DPRK's illicit activities related to the proliferation of weapons of mass destruction."