Iranian Official Describes Core Hurdle For Foreign Investments

(MENAFN- Trend News Agency) BAKU, Azerbaijan, March 26.​ Iran's inclusion in the Financial Action Task Force's (FATF) blacklist is one of the main reasons behind the lack of foreign investment interest in the country, Hadi Khani, Secretary of Iran's Prevention and Combating of Money Laundering and Terrorism Supreme Council, told local media, Trend reports.

Khani pointed out that at the moment, foreign investors are sitting on the fence when it comes to investing in Iran, owing to the sanctions laid down by the United States and the red tape set forth by FATF.

He emphasized that removing Iran from FATF's "high-risk" list would have a significant positive impact on the country's economic situation. The Basel (Basel III) index and FATF reports, which are essential factors in calculating investment risks, are important in managing these issues.

The official further pointed out that in the past Iranian year (from March 20, 2024, through March 20, 2025), several special and technical meetings were held with various sectors in Iran regarding FATF conventions.

“Due to Iran being on the high-risk countries list, China's Sinosure export insurance company is paying more attention to the risk calculations of investing in Iran. If this situation persists, the country's investment plans will face serious obstacles,” Khani added.

Khani also noted that two remaining FATF conventions (CFT and Palermo) are expected to be reviewed and approved soon, as Iran's removal from the blacklist could take a long time.

To note, Iran's Expediency Discernment Council is currently re-examining the two conventions (CFT and Palermo) that have not been ratified in Iran. He explained that there are differing opinions within the country about the approval of these conventions, with some seeing them as detrimental, while others believe they align with the country's interests.

The Financial Action Task Force (FATF) of the Organization for Economic Cooperation and Development is an intergovernmental body that regulates the rules for combating money laundering and terrorist financing. At the last meeting of this organization, Iran was warned that if the country's program of steps is not improved, Iran may be added to the list of non-cooperative countries. Iran has complied with 37 out of 41 FATF steps.

The remaining four steps or conventions fall under the scope of the legislation. "Amendments to the Law on Combating Money Laundering," "Amendments to the Law on Combating the Financing of Terrorism," "Accession to the International Convention on Combating Transnational Organized Crime (Palermo)," and Accession to the International Convention on Combating the Financing of Terrorism (CFT) have been drafted by the Iranian government and sent to the parliament. Although the four conventions were approved by the parliament and sent to the Advisory Council, the CFT conventions and the Palermo Convention have not yet been approved by the mentioned council.

The G7 group founded the FATF in 1989 to address money laundering. The entity is constituted of 37 stakeholders, with its governance framework centralized in the Parisian locale.

The Financial Action Task Force classified Iran as a high-risk jurisdiction in 2007 and implemented formal sanctions against Tehran in 2009. As a result, sovereign entities were compelled to implement due diligence in their fiscal and banking operations involving Iran. Since 2016, strategic diplomatic maneuvers have effectively deferred the execution of countermeasures against Iran.

The Financial Action Task Force (FATF) classified Iran as a non-compliant jurisdiction (blacklist) on February 21, 2020.

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