Time for FATF to revise policies towards Iran

368568_Iraqi takfiris

– Hossein Gharibi – New York-based counsellor of the Iranian Mission
dealing with legal questions. On Twitter: @gharibi14
– Alireza Ahmadi – New York-based Middle East analyst.
On Twitter: @aliahmadi110356

On June 13th the United Nations General Assembly adopted the fourth biennial review resolution of its “2006 Counter-Terrorism Strategy” following weeks of intense negotiations among representatives of member-states.

An issue that was emphasized by a large number of members was the unfounded and arbitrary categorization and labeling of states with regards to financing of terrorism which is deemed to be for political purposes. The resolution itself also underlines the importance of refraining from any practices and measures inconsistent with international law and the UN Charter principles. Such practices have been seen in the activities of the Financial Action Task Force (FATF) in recent years. The UN document implicitly reflects the views of many members in denouncing such activities by FATF.

Financing of terrorism has always been a concern for member-states. The case of Syria proved that even Al-Qaeda affiliates have faced no significant limitations in receiving millions of dollars to sustain their militancy in various parts of Syria for some years. The Al-Qaeda and Taliban Committees of the Security Council have been tasked, among other things, to oversee asset freezing sanctions against listed entities and individuals. Such sanctions, though necessary, have been insufficient in halting Al-Qaeda terrorists in the region from continuing to acquire funds for their deadly operations. This is due to a lack of cooperation among concerned parties as well as inadequate capacities to strengthen required monitoring mechanisms in some countries.

The FATF was founded in 1989 by several countries with the goal of coordinating and creating recommendations to prevent financial systems from being abused for the purpose of money laundering and terrorism financing. According to the organization, the “objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.  The FATF is therefore an ‘advocacy body’ which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.”

But the FATF has far exceeded its mandate and now annually publishes a categorization of countries that it views as not abiding by its recommendations. They claim that the designated jurisdictions have strategic deficiencies regarding addressing issues of compliance with regards to anti-money laundering and the financing of terrorism. FATF has categorized several countries at different levels of risk, including Iran at a high level since 2013. Even while acknowledging “Iran’s previous engagement with the FATF and recent submission of information”, it has singled out Iran for scrutiny. So while conceding the level of Iran’s cooperation, the FATF also levies unfounded and biased assertions while calling on its members to “apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/FT) risks.”

The main question here is who has authorized a multinational entity to label a country out of almost 200 states and attributes charges that are based on self-defined criteria derived in a non-legal and politicized manner. The very basis of international cooperation is constructive and respectful engagement between sovereign states to meet the challenges of our time and indeed, terrorism, as we have witnessed significantly in recent months, is a grave and serious challenge. Wrongly blaming some sovereign states would hardly serve such purpose. Iran has continuously been the target of terrorist attacks; from its southeastern border area to Beirut and from Sana’a to Peshawar , terrorists, generously financed by their sponsors, have ruthlessly attached Iran’s civilian and diplomatic targets.

To address the issue of the increased level of terror financing as proven by the aforementioned, along with the rise of Al-Qaeda offshoots like the Al-Nusra Front and the Islamic State of Iraq and Sham, requires more concerted efforts by all states. It is clear that the FATF can be part of the campaign to fulfill the base mission of limiting terror financing. Nothing should affect the essential goal of all out combat against violent extremism and terrorism in all its forms and manifestations. The United Nations counter-terrorism structure can benefit from FATF taking on a cooperative and multilateral approach to problem solving. While no approach can solve every problem, the UN’s methodology has been far more successful and productive than the more antagonizing tactics such as labeling and categorization practices.
Time to rethink such failed policy.

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