Has Squandered its Chance to Avoid Sanctions
By Joe Lieberman and
Wall Street Journal
June 19, 2017
As the Financial Action Task Force convenes for its annual
meeting this week in Spain, it’s an opportunity for the international
governing body on combating money laundering and terrorism financing to call for
a reinstatement of sanctions against Iran.
This year’s meeting marks a critical moment for Iran,
which along with North Korea are the only two countries in the world identified
by the FATF as serious risks to global financial security. Iran received a
12-month reprieve from sanctions at last year’s FATF meeting following the
nuclear deal. It was an opportunity for Tehran to prove its commitments to
fiscal propriety and to distance itself from funding acts of terror.
That reprieve has been for naught. One year later, Iran
remains the world’s leading state-sponsor of terrorism. It has done little to
enact the anti-money laundering policies requested by the FATF. With no proof of
tangible results, the FATF must call on its members to bring back the sanctions
Iran’s duplicity stems from the power dynamic between
President Hassan Rouhani and the Supreme Leader Ali Khamenei. Politics and
policy are controlled by Ayatollah Khamenei and enforced via the Islamic
Revolutionary Guard Corps. Mr. Rouhani doesn’t have much of an independent
policy legacy to speak of, despite his efforts to project a moderate and more
democratic veneer. Even agreeing to the nuclear deal was ultimately Mr.
The powers in control in Tehran loathe what it considers to
be the West’s meddling in its domestic affairs, and often lashes out in
response to external pressure. We see this with every joint Iranian-North Korean
missile test that violates United Nations Resolution 2231. And it has been much
the same for the FATF, with no change in either Iran’s money-laundering
policies or in winding down its terror funding over the past year.
Some countries still wish to give Iran a free pass, even
though the FATF recommends that “countries should criminalise terrorist
financing on the basis of the Terrorist Financing Convention, and should
criminalise not only the financing of terrorist acts but also the financing of
terrorist organisations and individual terrorists even in the absence of a link
to a specific terrorist act or acts.”
Over the past year, Iran has continued to provide money,
weapons, training and troops to the cause of terrorism throughout the Middle
East. From the Houthis in Yemen to propping up Bashar Assad’s forces in Syria,
Hezbollah in Lebanon and supporting Shiite militias in Iraq, there’s no
shortage of examples of Iranian influence over some of the most violent groups
in the world.
When it comes to its role in funding terrorism, Iran has
gone so far as to dub organizations such as Hezbollah a “liberation
movement” to create a loophole in its 2015 terrorist-financing legislation.
This is unacceptable. The FATF should reinstate sanctions against Tehran until
it adopts a credible legal architecture to combat the financing of terrorism.
Reinstating this global label would warn the financial community to avoid
business with Iran.
Money laundering poses its own business risks and is a
threat to the safety and soundness of Western financial institutions. The
Iranian regime uses its network of ostensibly legitimate business supporters to
conceal the origins of illegally obtained money. This potentially makes
financial institutions unwitting participants in a money-laundering operation,
tarnishing their reputation and increasing their liability for massive fines and
The FATF is primed to provide a thorough and just
assessment of Iran’s efforts in the past year. We hope it does so. The nuclear
deal provided the space and opportunity for Iran to demonstrate its commitment
to stopping the flow of funds to terror groups and rolling back its
money-laundering operations. But Iran squandered this opportunity.
We encourage the FATF to not only call on its members to
reinstate sanctions against Iran, but that they implement more-stringent
resolutions as the organization itself recommends for every jurisdiction that
poses a threat to the global financial system.