Financial Action Task Force tightens screws on Tehran over terror financing

The Financial Action Task Force’s ruling threatens investment in Iran. (Supplied)
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Updated 22 February 2020

Financial Action Task Force tightens screws on Tehran over terror financing

  • Watchdog says Iran failed to fulfill its promises to curb terror financing despite repeated warnings
  • Iran central bank chief Abdolnasser Hemmati said the decision will not affect the country

PARIS: An international agency monitoring terrorism funding announced tough new financial scrutiny of Iran on Friday and added seven countries to a watch list.

Pakistan, meanwhile, won a reprieve from the Financial Action Task Force at its meetings in Paris this week. The monitoring body gave Pakistan’s government another four months to crack down on terrorism financing and did not put the country on a damaging “black list.”

Iran and North Korea are the only two countries currently on the agency’s black list. That means international financial transactions with those countries are closely scrutinized, making it costly and cumbersome to do business with them. International creditors can also place restrictions on lending to black-listed countries.

The FATF decided on Friday to further tighten the screws on Iran, imposing extra measures that could require audits or more transactions and make it even harder for foreign investors to do business there.

The group made the decision because Iran failed to fulfill its promises to the FATF despite repeated warnings. In a statement, the organization said that Iran hasn’t done enough to criminalize terrorist financing, require transparency in wire transfers or freeze terrorist assets targeted by UN sanctions.

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The head of Iran’s central bank, Abdolnasser Hemmati, said the decision will not affect the country.

“Such incidents will create no problem for Iran’s foreign trade and currency,” he said in a statement. Hemmati said the FATF decision was based on the “enmity” of the US and Israel toward Iran.

Pakistan, meanwhile, has been trying to get off the FATF gray list, the color code for countries that are only partially fulfilling international rules for fighting terrorism financing and money laundering.

Pakistan’s government has been working to shore up the country’s faltering economy and attract foreign investment and loans, making the FATF’s assessment especially important.

The FATF said that Pakistan had fulfilled 14 of 27 steps to get off the watch list, but still must do more to track money transfers and investigate and prosecute terrorism financiers.

The Pakistani government said in a statement that it “stands committed for taking all necessary action required” to fulfill the remaining steps. “A strategy in this regard has been formulated and is being implemented.”

The Financial Action Task Force also put seven new countries on its gray list because of gaps or failures in stemming the financing of terrorist groups or money laundering. The countries — Albania, Barbados, Jamaica, Mauritius, Myanmar, Nicaragua and Uganda — were ordered to take a series of legal and other steps to be removed from the list and avoid further financial punishment.


Initial investigations point to negligence as cause of Beirut blast

Updated 9 min 48 sec ago

Initial investigations point to negligence as cause of Beirut blast

  • 2,750 tonnes of ammonium nitrate, used in fertilisers and bombs, had been stored for six years at the port without safety measures
  • A source said a fire had started at warehouse 9 of the port and spread to warehouse 12, where the ammonium nitrate was stored

BEIRUT: Initial investigations indicate years of inaction and negligence over the storage of highly explosive material in Beirut port caused the blast that killed over 100 people on Tuesday, an official source familiar with the findings said.
The prime minister and presidency said on Tuesday that 2,750 tonnes of ammonium nitrate, used in fertilisers and bombs, had been stored for six years at the port without safety measures.
"It is negligence," the official source told Reuters, adding that the storage safety issue had been before several committees and judges and "nothing was done" to issue an order to remove or dispose of the highly combustible material.
The source said a fire had started at warehouse 9 of the port and spread to warehouse 12, where the ammonium nitrate was stored.
Tuesday's explosion was the most powerful ever suffered by Beirut, a city is still scarred by civil war three decades ago and reeling from a deep financial crisis rooted in decades of corruption and economic mismanagement.
Badri Daher, Director General of Lebanese Customs, told broadcaster LBCI on Wednesday that customs had sent six documents to the judiciary warning that the material posed a danger.
"We requested that it be re-exported but that did not happen. We leave it to the experts and those concerned to determine why," Daher said.
Another source close to a port employee said a team that inspected the ammonium nitrate six months ago warned that if it was not moved it would "blow up all of Beirut".
According to two documents seen by Reuters, Lebanese Customs had asked the judiciary in 2016 and 2017 to ask the "concerned maritime agency" to re-export or approve the sale of the ammonium nitrate, removed from the a cargo vessel, Rhosus, and deposited in warehouse 12, to ensure port safety.
One of the documents cited similar requests in 2014 and 2015.
"A local and international investigation needs to be conducted into the incident, given the scale and the circumstances under which these goods were brought into the ports," said Ghassan Hasbani, former deputy prime minister and a member of the Lebanese Forces party.
Shiparrested.com, an industry network dealing with legal cases, had said in a 2015 report that the Rhosus, sailing under a Moldovan flag, docked in Beirut in September 2013 when it had technical problems while sailing from Georgia to Mozambique with 2,750 tonnes of ammonium nitrate.
It said that, upon inspection, the vessel was forbidden from sailing and shortly afterwards it was abandoned by its owners, leading to various creditors coming forward with legal claims.
"Owing to the risks associated with retaining the ammonium nitrate on board the vessel, the port authorities discharged the cargo onto the port's warehouses," it added.