WANA (Oct 25) – The Financial Action Task Force (FATF) announced on Friday that it has rejected Iran’s approval of the Palermo Convention due to Tehran’s extensive reservations regarding the definition and identification of terrorist groups.

 

According to a statement published on the FATF website, Iran submitted a report in September 2025 detailing its ratification of the United Nations Convention against Transnational Organized Crime (Palermo Convention).

 

While the FATF acknowledged receiving Iran’s report and engagement, it stated that Iran’s reservations to the convention are excessively broad and that the country’s domestic implementation of the Palermo Convention does not meet FATF standards.

 

The FATF also noted that Iran has failed to implement most of its action plan since 2016.

FATF statement on Iran

FATF statement on Iran. Social media/ WANA News Agency

FATF Aligns with Western Position on UN Security Council Resolutions

In another part of its report, the FATF dismissed the interpretation of Iran, China, and Russia regarding the non-reinstatement of UN Security Council resolutions against Tehran. Endorsing the Western reading of those resolutions, the FATF said:

 

“In light of the UN Security Council resolutions related to Iran’s non-compliance with its nuclear obligations, the FATF reminds all jurisdictions that they must, in line with FATF standards, address the risks of proliferation financing originating from Iran.”

 

Citing ongoing risks of terrorism financing and proliferation, and Iran’s incomplete action plan, the FATF called on all members and jurisdictions to apply effective countermeasures against Iran, including:

 

  • Restricting the establishment of subsidiaries, branches, or representative offices of financial institutions from or in Iran, given its inadequate AML/CFT systems.
  • Prohibiting financial institutions from opening branches or representative offices in Iran, or taking into account that the entity operates in a jurisdiction with insufficient AML/CFT safeguards.

 

Iran Remains on FATF Blacklist

The FATF reiterated that Iran will remain on its list of high-risk jurisdictions until it fully implements its action plan.

 

The statement read that, as previously stated, if Iran ratifies and implements the Palermo and Terrorist Financing (TF) Conventions in line with FATF standards, the FATF will consider whether to suspend countermeasures. However, if Iran fails to demonstrate further progress, the FATF may take additional steps.

FATF statement on Iran. Social media/ WANA News Agency

FATF statement on Iran. Social media/ WANA News Agency

The FATF once again urged Tehran to make tangible progress in its action plan by fully implementing the following measures:

 

  • Properly criminalizing terrorist financing, including removing exemptions for groups deemed to be “fighting against foreign occupation, colonialism, and racism.”
  • Identifying and freezing terrorist assets in line with UN Security Council resolutions.
  • Ensuring the effective implementation of a robust Customer Due Diligence (CDD) regime.
  • Demonstrating how Iranian authorities identify and sanction unlicensed money/value transfer service providers.
  • Ratifying and implementing the Terrorist Financing Convention (TF) and ensuring that both TF and Palermo conventions are enforced in accordance with FATF standards, including the capacity for mutual legal assistance.
  • Ensuring that financial institutions verify wire transfers with complete information on both the sender and the recipient.