PARIS (AP) – 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 Pakistanâ€™s government another four months to crack down on terrorism financing and did not put the country on a damaging â€œblack list.â€
Iran and North Korea are the only two countries currently on the agencyâ€™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 – whose economy is already reeling – by imposing extra measures that could require audits on 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 U.N. sanctions.
The head of Iranâ€™s central bank, Abdolnasser Hemmati, said the decision will â€œwill create no problem for Iranâ€™s foreign trade and currency.â€
Iranian Foreign Ministry spokesman Abbas Mousavi called the decision â€œpoliticizedâ€ and a result of pressure from the United States, Saudi Arabia and Israel.
Mousavi said Iran had implemented â€œall regulations and laws linked to money laundering and financing terrorism in the more than past two years.â€
After President Donald Trump unilaterally withdrew from Iranâ€™s 2015 agreement with world powers to curb its nuclear program, the U.S. imposed sanctions that have exacerbated Iran’s economic crisis, pummeling the local currency, wiping away many peopleâ€™s life savings and making it tougher for Iran to export oil. The Institute of International Finance estimates that Iranâ€™s economy will contract this fiscal year by more than 7%.
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.
Pakistanâ€™s Prime Minister Imran Khan has been working to shore up the countryâ€™s faltering economy and attract foreign investment and loans, making the FATFâ€™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 â€œstands committed for taking all necessary action required” to fulfill the remaining steps. “A strategy in this regard has been formulated and is being implemented.â€
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.
Nasser Karimi in Tehran and Munir Ahmed in Islamabad contributed to this report.