Iranian Economy Minister Abdolnasser Hemmati expressed optimism about advancing Iran’s compliance with the Financial Action Task Force (FATF) during a meeting with reporters on November 13, stating that the ministry is pursuing an alternative legal route to meet the international body’s standards.

Iran has been on the FATF blacklist for several years, with non-compliance cutting off Iranian banks from global financial systems and complicating access to foreign currency reserves, ultimately increasing the costs of Iran’s non-oil international trade. Support for terror groups like Hezbollah has been a concern of the FATF towards Iran in its application, stating that the country needs to cut relations with those groups before being welcomed into the fold. 

In 2016, FATF recognised Iran’s commitment to address gaps in its anti-money laundering (AML) and counter-terrorism financing (CFT) measures, as well as its efforts to seek technical support for implementing the FATF Action Plan.

Since then, Iran has implemented a cash declaration regime, amended its Counter-Terrorist Financing and Anti-Money Laundering laws, and adopted an AML by-law, still, the lingering issue of its funding of groups has been a persistent problem.

The Iranian government has yet to secure approval for two critical bills—the Palermo Convention on transnational organised crime and the CFT convention—from top legislative authorities, including the Guardian Council, despite both bills passing through parliament and receiving government endorsement.

The unresolved bills were slated for review by the Expediency Discernment Council, the body responsible for resolving legislative disputes between parliament and the Guardian Council, yet their revision has been postponed for several years.

As a result, in February 2020, FATF reinstated countermeasures against Iran, urging all member states and jurisdictions to apply effective countermeasures.

The election of President Masoud Pezeshkian in mid-2024 has renewed hope for resolving the issue, as he pledged to finalise the Action Plan and pursue the suspension of counter-measures against Iran.

In his most recent statement, Hemmati reiterated that continued engagement with FATF aligns with Iran’s national interests. “We are following up on this issue,” he remarked, underscoring the government’s commitment to advancing FATF compliance through alternative lawful means. “I believe it serves the country’s interests,” he added without providing further details.

Hemmati also confirmed that a formal request related to FATF would soon be submitted to the Expediency Discernment Council. “We are approaching this from a different direction and will bring it to the Council’s consideration as well,” he explained.

His comments coincide with Iran’s assessment of the benefits of full FATF compliance amid ongoing economic pressures. Addressing private sector leaders, Sadeq Amoli Larijani, head of the Expediency Discernment Council, downplayed the practical impact of FATF and SWIFT restrictions, saying that “of the 42 FATF guidelines, 40 are currently in operation within Iran.”

He clarified that FATF serves as a set of guidelines rather than a binding agreement, allowing Iran to implement provisions selectively in line with its policy priorities.

Amoli Larijani also stressed that Iran’s parliament is barred from passing laws contradicting the country’s core policy framework. “A robust enforcement mechanism ensures that all parliamentary resolutions are fully aligned with the nation’s strategic objectives,” he added.