Anti-Money Laundering Body Urges More Scrutiny of Iran, North Korea

A woman counts Saudi riyals. FATF said that if Iran did not step up its anti-money laundering efforts, the anti-money laundering organization would consider asking its members to strengthen "countermeasures" directed at Iran as soon as June. REUTERS/Faisal Al Nasser

WASHINGTON, Feb 20 – An international anti-money laundering group wants government financial intelligence agencies to give extra scrutiny to transactions and business relationships involving Iran and North Korea.

Paris-based Financial Action Task Force (FATF) said on Friday that it remained “particularly and exceptionally concerned” about what it called Iran’s “failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system.”

In the wake of the relaxation of international financial and trade sanctions against Iran following a U.S.-led international accord last year that limited Tehran’s nuclear program in exchange, the transaction network SWIFT reconnected several Iranian banks, allowing them to resume cross border transactions with foreign banks.

FATF, however, urged its member agencies to tell financial institutions to continue to give “special attention” to dealings and transactions with Iranian companies and banks.

FATF also called on Iran to step up its own anti-money laundering efforts by “criminalizing terrorist financing” and putting in place the kind system for reporting suspicious financial transactions to central governments which FATF members have instituted.

FATF said that if Iran did not step up its anti-money laundering efforts, FATF would consider asking its members to strengthen “countermeasures” directed at Iran as soon as June.

FATF also expressed concern about “significant deficiencies” in North Korea’s systems. It specifically warned member agencies to “protect against correspondent relationships being used to bypass or evade counter-measures” and to be wary when considering requests to allow North Korean financial institutions to open branches or subsidiaries in their countries.

FATF also said it welcomed efforts by Algeria, Angola and Panama to tighten their anti-money laundering precautions. But it said it still assessed that there are “strategic deficiencies” in the anti-money laundering efforts of Afghanistan, Bosnia and Herzegovina, Guyana, Iraq, Laos, Myanmar, Papua New Guinea, Syria, Uganda, Vanuatu and Yemen.

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