'Iran speaker says government overstepped on anti-terror finance rules'

 Iranian Parliament Speaker Mohammad Bagher Ghalibaf has ruled that part of the government’s anti-terror financing regulations violates Iranian law, saying decisions on who is designated as terrorist must remain with the Supreme National Security Council.

In a letter to President Masoud Pezeshkian, Ghalibaf objected to amended government rules that kept national working groups involved in deciding which individuals, groups and organizations should face terrorism-related financial restrictions.

The rules cover measures including freezing or blocking assets.

Ghalibaf said Iranian law gives the Supreme National Security Council responsibility for identifying terrorist individuals, groups and organizations, and that the government could not give that authority to its own working groups.

What did the government change?

The cabinet adopted regulations setting out how terrorism-related financial restrictions should be applied.

They created a national working group to review cases involving people and organizations that could be placed on terrorism-related lists. The group also had a role in decisions that could lead to assets being frozen.

The government later amended the rules so that the working group would be established with the Supreme National Security Council’s approval and operate under its direction.

But the amended rules still allowed the group to make some listing decisions. Ghalibaf said that remained inconsistent with the law because the council itself, rather than a government working group, has the legal authority to determine who Iran considers terrorist.

What does Ghalibaf’s ruling change?

The letter concerns the government regulation used to implement the law, not Iran’s underlying law against terrorist financing.

It also does not address Iran’s membership in international treaties. The issue is narrower: whether the cabinet gave its working groups powers that Iranian law reserves for the Supreme National Security Council.

Ghalibaf issued the finding through Iran’s established system for reviewing cabinet regulations. His letter says the government must correct the disputed provision within the legal deadline and that the part found unlawful will lose effect if it is not corrected.

Why this matters internationally

The dispute comes as Iran tries to address shortcomings identified by the Financial Action Task Force, or FATF, the international body that sets standards against money laundering and terrorist financing.

Iran has remained on FATF’s high-risk list since 2020. FATF says Tehran has still not completed most of the action plan it accepted in 2016 and continues to call on other countries to apply financial countermeasures.

Those measures are separate from US sanctions, but both make it harder for Iranian banks and businesses to maintain normal relationships with financial institutions abroad.

One of FATF’s outstanding demands is for Iran to have an effective system for identifying and freezing terrorist assets in line with relevant UN Security Council resolutions.

Iran has already changed laws and joined two treaties

Iran has spent years changing its financial laws in response to FATF concerns.

It amended its domestic counter-terror financing law in 2018 and its anti-money-laundering law in 2019.

Last year, Iran also completed accession to two UN treaties that had been politically disputed for years  the Palermo Convention against transnational organized crime and the International Convention for the Suppression of the Financing of Terrorism.

Joining those treaties did not mean Iran joined FATF. FATF is a separate organization that judges whether a country’s laws and enforcement meet its standards.

Joining the treaties was not enough for FATF

Iran joined both treaties with reservations, including conditions allowing it to apply them within the framework of its own constitution and domestic laws.

In the case of the Terrorist Financing Convention, Iran also formally said the Supreme National Security Council would determine which individuals, groups and organizations it considers terrorist.

FATF said in June that Iran’s reservations to both treaties were “overly broad” and that its domestic implementation was still not in line with FATF standards. It also said Iran had failed to address the majority of its original action plan.

So Iran can legally be a party to the UN treaties while still falling short of FATF requirements.

The problem at the center of Ghalibaf’s ruling

The latest dispute goes directly to one of those unresolved questions.

Iran needs a system capable of identifying terrorist-linked individuals and organizations and freezing their assets. But under Iran’s own legal framework, Ghalibaf says the decision about who is considered terrorist must be made by the Supreme National Security Council, not delegated to government working groups.

The government must therefore adjust its implementation rules without weakening the financial controls Iran is trying to demonstrate to FATF.

https://www.iranintl.com/en/202610164168