The Financial Action Task Force (FATF) has advised that financial institutions should be told by regulators to scrutinise transactions and commercial relationships with Iranian entities with extra care.

The advice comes in the wake of easing of sanctions on Iran that has seen electronic messaging platform SWIFT reconnect some Iranian financial institutions with the global banking network and a resumption of letter of credit (L/C) business (TBFC 19 January 2016).

Exceptionally concerned

The Paris-based task force said it remained, “particularly and exceptionally concerned” about what it described as Iran’s “failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system.”

The FATF advised regulators to advise financial institutions that they should pay “special attention to dealings and transactions with Iranian companies and banks.”

Countermeasures threatened

The task force also urged Iran to tighten its anti-money laundering approach by, “criminalising terrorist financing” and establishing reporting mechanisms for suspicious financial transactions similar to those adopted by FATF members worldwide.

If Tehran does not tighten its anti-money laundering system, FATF warned that it would recommend, perhaps as early as June this year, that its members should strengthen countermeasures against Iran’s deficiencies.

Categories: Trade Based Financial crimes News