Watchdog hits Iran with June deadline to tighten finance rules

Iran has until June to fix its anti-money laundering and terrorism financing rules or face increased international scrutiny of its banks, a global watchdog said on Friday.

Last October, the Paris-based Financial Action Task Force (FATF) watchdog gave Iran until February to complete an action plan of reforms that would bring it in line with global norms, or face consequences.

The task force concluded this week at a meeting that “there are still items not completed” and said it “expects Iran to proceed swiftly on the reform path.”

If the shortcomings were not remedied by June, currently suspended countermeasures would automatically kick in, said Marshall Billingslea, the US assistant Treasury secretary for terrorist financing, after chairing the FATF meeting.

“That is a significant indication from the FATF that the action plan is overdue and we expect it to be implemented without delay,” he said.

If countermeasures are reimposed, FATF members worldwide will be required to step up supervision of Iranian bank branches on their territory.

In the absence of compliance, the finance watchdog called on its members to advise their banks to scrutinize all business with Iran, including stepping up controls on transactions.

Foreign businesses say compliance and Iran’s removal from FATF’s blacklist is key for making investments in the country, especially after the US reimposed sanctions on Iran.

France, Britain and Germany have tied this compliance angle with the use of a new channel for non-dollar trade with Iran to avert US sanctions.

Those countries have said they expected Iran would swiftly put into place all elements of its FATF action plan.