Suspension of countermeasures against Iran, a testing ground for FATF
In October 2007, Iran was put in the Enhanced Due Diligence (EDD) list of FATF and in 2009 was downgraded to the countermeasure list. The designation imposed burdens on Iran’s economy, including stringent constraints on its international banking ties, reduced foreign investment, and rising transaction costs.
Pursuant to political commitment signed by Iran in 2016, countermeasures by the Financial Action Task Force (FATF) against Iran were suspended. Based on this 41-point action plan, Iran committed to join two conventions and make some amendments in domestic laws, including AML and CFT laws.
In February 2020, however, due to the failure to adopt the conventions, the suspension was terminated. Meanwhile FATF in its statement declared that if Iran ratifies these two conventions, it would consider extending the suspension of countermeasures.
In August 2025, Iran’s top arbitration body the Expediency Council ratified the Palermo Convention and forwarded its instrument of accession to the United Nations. Later, on October 1, the same body gave conditional approval for joining the CFT.
Given these steps, it is expected that Iran’s standing with FATF may improve, potentially opening space to scale down the countermeasures the global financial crime watchdog has imposed — and to restore safer corridors for Iran’s international banking and financial relations. Yet obstacles remain.
To shed light on the path ahead, Iran Daily talked to Fatemeh Mahjourian, an international banking expert.
IRAN DAILY: Can Iran’s ratification of the last of two conventions convince FATF to suspend its countermeasures against Iran?
MAHJOURIAN: According to international banking standards and norms, one key barrier to correspondent banking relationships is Iran’s status on the blacklist or under FATF countermeasures. In FATF’s declarations about Iran — repeated three times annually since February 2020 — it is stated that: “if Iran ratifies the Palermo and Terrorist Financing Conventions in line with the FATF standards, FATF will decide on next steps, including ”whether to suspend countermeasures
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