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Foreign businesses, wary of getting hit by US secondary sanctions if they enter into trade or investment deals with Iran, say Iranian compliance with FATF rules is essential if Tehran wants to attract investors.
Nevertheless, Iran’s clerical rulers are divided on the issue. Their main argument is that if Iran adopts compliance with FATF rules it could hinder the provision of support from Iran to its allies including Lebanon’s Hezbollah. Rouhani, a pragmatic moderate politician who must continually do battle with the hardliners that dominate the clerical establishment, counter that given Iran’s parlous economic position caused by the weight of US sanctions, boosting foreign trade with Europe and Asia by agreeing to FATF’s demands makes a lot of sense.
Rouhani has cautioned that Iran might risk a severe financial crisis if it is blacklisted by FATF, as that move might even place Tehran’s trade with friendly countries like China and Russia in jeopardy.
Iran’s economy is set to fall deeper into recession in the Persian calendar year of 2019/2020 which ends in mid-March. The country’s foreign reserves could drop to $73bn within two months, a loss of almost $40bn in two years, the Institute of International Finance (IIF) said earlier this month.
Parliament has passed four bills required by FATF. The progress of two of those bills, which would link Iran to the Palermo and Terrorist Financing Conventions, have been held up by two powerful hardline bodies, the Guardian Council and the Expediency Council, despite gaining initial approval from MPs.
Separately, Rouhani on January 27 said Iranians should not allow Trump’s “maximum pressure” approach to harm national unity ahead of parliamentary elections. Rouhani made the remark while hitting out at hardliners over the mass disqualification of candidates, mainly moderates.
“We should not let Trump succeed in creating gaps between the establishment and people ... We should remain united ... Don’t turn your back on the [February 21] elections. Let’s have a high turnout,” Rouhani said. “We should not let Trump and those terrorists in the White House isolate Iran.”
The Guardian Council, which vets all election candidates, has disqualified about 9,000 of the 14,000 who registered to run. Reuters reported that moderates say in most cities they have no candidates to enter the race.
“This parliamentary election is a very important election... I have written letters to relevant authorities to resolve the issue of disqualifications,” said Rouhani. “You [hardliners] claim that you will win the election. That is fine, but just let the election be a competitive one.”
8​ IRAN Country Report​ February 2020 www.intellinews.com