Watchdog extends sanctions freeze on Iran but demands end to terror funding

A global financial watchdog warned Iran to clamp down on terrorism financing by February or face a deeper squeeze on its economy.

Tehran, already hurt by a resumption of US sanctions over its nuclear programme, this month approved a bill to help meet demands imposed by the international Financial Action Task Force.

The task force, after a meeting at its Paris headquarters this week, welcomed the legislation and extended a suspension of measures that has allowed Iran to escape further isolation from international finance.

But nine of the 10 “action plan” items needed to remove Iran from a task force blacklist have yet to be adopted by Tehran, said Marshall Billingslea, the US assistant treasury secretary for terrorist financing.

“We expect that they will have adopted all these measures by February,” Mr Billingslea said.

He said that if measures were not adopted by February next year, the watchdog would take further steps.

Access to finance has become particularly pressing for Tehran, since the US walked out of a 2015 nuclear deal this year and began reimposing sanctions.

Iran’s Foreign Ministry said the task force’s decision was “another victory” for Tehran’s diplomacy, but urged the financial watchdog to “resist political pressures” in its dealings with Iran.

The other parties to the deal – Britain, France, Germany, China and Russia – have tried to salvage the agreement and maintain trade with Iran, but demanded that it obey the task force.

Among the further steps demanded by the task force, originally an initiative of the G7 nations, was for Iran to identify and freeze extremist assets in line with UN Security Council resolutions.

Another was for Tehran to remove an exemption from its legislation that allows financing of groups trying to end “foreign occupation, colonialism and racism”.

Iran has long been accused by the US, Israel and regional rivals such as Saudi Arabia of financing a web of extremist groups, including the Hezbollah militia in Lebanon.

The task force said it would review Iran’s remaining legislation when it was in place to determine whether Tehran had met its demands.

It urged its members to be more vigilant in checking deals involving Iranian businesses and citizens.

Iran is one of only two countries on the blacklist. The other is North Korea. The task force repeated that it had “serious concerns” about Pyongyang’s illicit activities to finance its missile and nuclear programmes.

Iran is one of only two countries on the task force’s blacklist. The other is North Korea