Body eases Iran restrictions, keeps blacklist

This photo shows the opening of the Financial Action Task Force (FATF) meeting in Busan, South Korea on June 22, 2016.

The world’s anti-money laundering body has suspended some of its restrictions against Iran, citing the country’s commitment to legitimate business.

The Financial Action Task Force (FATF) hailed on Friday Iran’s adoption of an action plan to address shortcomings in its anti-money laundering policies and its decision to seek assistance with implementation.

In its plenary meeting in South Korea, the body took into account Iran’s implementation of an anti-money laundering law and its membership at the Eurasian Group, an FATF-style regional body.

Iran, however, will remain on the FATF blacklist until the full implementation is complete, the body said. Moreover, if it fails to demonstrate “sufficient progress” at the end of the yearlong suspension, the restrictions will be reimposed.

The body is under the influence of the United States, which is still maintaining some of its sanctions on Iran despite a nuclear agreement reached in July. US pressure groups, meanwhile, are urging the FATF to keep Iran on the blacklist.

Last week, Rep. Ed Royce who chairs the foreign relations committee in the House of Representatives wrote to US Treasury Secretary Jack Lew, asking him to maintain the designation.

Since the implementation of the agreement, global banks have cited the FATF’s reviews on Iran to avoid processing Iranian transactions, prompting the Islamic Republic to push for removal from the list which many believe is politically motivated.

Washington’s agreement to ease FATF restrictions came as Boeing confirmed its plans to sign a massive aircraft deal with Iran.

In a letter to US Congress on Thursday, Boeing said national airline Iran Air intended to buy 80 passenger planes worth $17.6 billion and lease 29 others, with deliveries expected to begin as early as next year.

Boeing’s European rival Airbus has also a $27 billion agreement with Iran for 118 passenger planes. Iran’s Foreign Minister Mohammad Javad Zarif said on Wednesday he hoped that Tehran’s deal with Boeing would pave the way for finalizing the contract with Airbus.

US officials, however, said the FATF’s announcement has no effect on the US government’s sanctions on Iran.

“Global financial institutions understand that this illicit conduct, not empty expressions of intent, must be changed before risking business with Iran,” said Mark Dubowitz, an Iran sanctions expert at the Washington-based Foundation for Defense of Democracies.

The FATF’s own advice seemed to be playing into those fears. The body called on countries around the world to “continue to advise their financial institutions to apply enhanced due diligence to (Iranian) business relationships and transactions.”

Top Iranian officials have complained that the US is not fulfilling its part of the nuclear agreement and accused Western officials of taking half-hearted measures which make financial institutions maintain their “hands off” approach toward Iran.

Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei has said the US is resorting to “deception” to obstruct international trade with Iran.

Officials in the US State Department and Treasury have frequently said that Iran would not be given any access to the American financial system.