Iran seeks to get out of FATF blacklist amid domestic political divisions | Financial Markets News
Iran Aims to Address Financial Watchdog’s Blacklisting Amid Ongoing Challenges
Tehran, Iran – Iran’s Financial Intelligence Unit announced on Sunday its commitment to continue efforts to remove the country from a blacklist maintained by the Financial Action Task Force (FATF), a global watchdog focused on combating money laundering and terrorism financing. The statement follows the FATF’s recent decision to renew Iran’s blacklisting, a status the country has faced for over 20 years due to obstruction from domestic opponents, as reported by the official IRNA news agency.
The FATF, based in Paris, has intensified measures aimed at isolating Iran from global financial markets, turning particular attention to virtual asset service providers (VASPs) and cryptocurrencies. It recommended that member states and financial institutions:
- Refuse to establish representative offices for Iranian financial institutions and VASPs, citing noncompliance risks.
- Prohibit financial institutions and VASPs from setting up offices in Iran.
- Limit business relationships or transactions—especially virtual asset transactions—conditional on risk assessments.
- Re-evaluate existing correspondent banking relationships with Iranian institutions.
The FATF’s recommendations extend to the flow of humanitarian assistance, food, health supplies, diplomatic costs, and personal remittances, emphasizing that these should be handled with caution, considering potential risks of terrorist financing linked to Iran.
Iran has remained blacklisted alongside North Korea and Myanmar, facing heightened scrutiny since October 2019. This designation has significantly hindered access to international banking services for Iranian banks and citizens, forcing them to rely on clandestine intermediaries for transactions.
The renewed countermeasures from the FATF build on previous measures, including a specific warning regarding virtual assets, signaling a growing concern over Iran’s financial practices. These recommendations may further restrict transaction opportunities for Iranian entities, and smaller banks maintaining previous correspondent relations with Iran may reconsider those ties.
The ongoing isolation has negatively impacted Iran’s economy, contributing to a steady depreciation of the national currency, the rial.
The FATF’s origin dates back to 1989 when it was established by the Group of Seven (G7) countries to combat money laundering. Over the years, its mandate expanded to include countering the financing of terrorism and weapons of mass destruction. The FATF has officially expressed concerns regarding Iran since the late 2000s, coinciding with heightened international tensions over its nuclear program.
In 2015, after signing a nuclear agreement with world powers that temporarily lifted sanctions, Iran received acknowledgment from the FATF of a “high-level political commitment.” However, following the U.S. withdrawal from the agreement in 2018 and the imposition of a “maximum pressure” campaign, Iran’s efforts to fulfill FATF requirements stalled amid internal opposition.
Currently, the FATF is keenly aware of Iran’s nuclear and military agendas, as evidenced by ongoing sanctions imposed by the United Nations Security Council. Given these restrictions, the Iranian government has expressed concerns that full compliance with FATF guidelines could undermine its capacity to support allied armed groups across the region.
In response to domestic pressures, Iranian legislators ratified certain FATF-related laws in 2025, albeit with conditions asserting that compliance would not hinder the country’s support for groups opposing foreign occupation or aggression. However, these conditions have not been accepted by the FATF, leading to the continuation of countermeasures against Iran.
As the situation evolves, the international community remains focused on Iran’s compliance efforts, particularly regarding the identification and freezing of terrorist assets as stipulated by United Nations resolutions.
