In this photo released by the official website of the office of the Iranian supreme leader, Supreme Leader Ayatollah Ali Khamenei casts his ballot in the parliamentary elections, in Tehran, Iran, Friday, Feb. 21, 2020. Iranians began voting for a new parliament Friday, with turnout seen as a key measure of support for Iran's leadership as sanctions weigh on the economy and isolate the country diplomatically. (Office of the Iranian Supreme Leader via AP)

Watchdog toughens global financial scrutiny of Iran

February 21, 2020 - 9:48 am

PARIS (AP) — An international agency monitoring terrorism funding announced tough new financial scrutiny of Iran on Friday and added seven countries to a watch list.

Pakistan, meanwhile, won a reprieve from the Financial Action Task Force at its meetings in Paris this week. The monitoring body gave Pakistan’s government another four months to crack down on terrorism financing and did not put the country on a damaging “black list.”

Iran and North Korea are the only two countries currently on the agency’s black list. That means international financial transactions with those countries are closely scrutinized, making it costly and cumbersome to do business with them. International creditors can also place restrictions on lending to black-listed countries.

The FATF decided on Friday to further tighten the screws on Iran, imposing extra measures that could require audits or more transactions and make it even harder for foreign investors to do business there.

The group made the decision because Iran failed to fulfill its promises to the FATF despite repeated warnings. In a statement, the organization said that Iran hasn't done enough to criminalize terrorist financing, require transparency in wire transfers or freeze terrorist assets targeted by U.N. sanctions.

Pakistan, meanwhile, has been trying to get off the FATF gray list, the color code for countries that are only partially fulfilling international rules for fighting terrorism financing and money laundering.

Pakistan’s government has been working to shore up the country’s faltering economy and attract foreign investment and loans, making the FATF’s assessment especially important.

The FATF said that Pakistan had fulfilled 14 of 27 steps to get off the watch list, but still must do more to track money transfers and investigate and prosecute terrorism financiers.

The Financial Action Task Force also put seven new countries on its gray list because of gaps or failures in stemming the financing of terrorist groups or money laundering. The countries - Albania, Barbados, Jamaica, Mauritius, Myanmar, Nicaragua and Uganda - were ordered to take a series of legal and other steps to be removed from the list and avoid further financial punishment.

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