Suspension of countermeasures ...
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Thus, FATF has already held out the promise that passing those two conventions would prompt it to reconsider suspending countermeasures against Iran. Although Iran’s action plan comprises 41 items and those two are only part of it — many others having been either fully or largely implemented — FATF has long treated these two conventions as technically pivotal. In the past, FATF signaled that their ratification would trigger review of countermeasures.
It should also be recalled that under the Trump administration, the US had insisted that Iran remain subject to countermeasures, a stance that drew protests from Iran and prompted it to correspond with FATF leadership, challenging whether decisions should rest on a consensus or be swayed by one state. As FATF President Elisa de Anda Madrazo publicly responded, no single country may unilaterally determine FATF decisions.
Now, the ball is in FATF’s court. If it overlooks ratification of these two conventions, it risks exposing a politicized bias favoring US pressure. On the flip side, should FATF vote to extend the suspension of countermeasures, that would be seen as walking the talk—affirming that it maintains a technical, not political, approach toward member nations. The expectation is that countermeasures would be suspended, thereby alleviating FATF-driven burdens on Iran’s banking relations and creating a window for improved access to global banking networks.
Could Iran’s reservations give FATF a reason to withhold lifting countermeasures?
The FATF methodology admits that only certain articles of conventions fall within the domain of FATF mandates and thus FATF can enter certain reservations only to ensure they do not undermine the main obligations.
The right to enter reservations is one granted by the UN to member states, and those reservations are common among many countries.
The reservations Iran has adopted closely mirror those of other countries. The Islamic Republic of Iran examined FATF assessment reports for these nations and verified that their reservations faced no objections. Therefore, it is expected that Iran’s reservations will pass muster and not be singled out for censure, as they do not undermine any of the FATF Recommendations and primarily concern the overarching principles of the convention. If, however, FATF treats Iran’s case differently—demanding stricter conformity than other members—it could be interpreted as a political approach. In other words, how FATF handles Iran’s reservations may itself be the litmus test for whether it is operating as a neutral technical body or one subject to geopolitical sway.
Assuming Iran is removed from FATF’s blacklist, can that make any difference in Iran’s banking and economic ties?
Lifting the FATF countermeasures would mitigate one major impediment, but it would not by itself guarantee broad reopening of financial relations. Many foreign institutions have been reluctant to engage with Iran not only over FATF rules but also because of structural weaknesses in Iran’s banking system.
For Iran’s banking network to capitalize on the removal, it must align more closely with global norms — such as implementing the Basel Committee on Banking Supervision (BCBS) standards, International Financial Reporting Standards (IFRS), and other international regulations. Only then would confidence rise that its financial sector is stable, sound, and ready to engage in secure correspondent relationships. These reforms must convey to the outside world that Iran is serious about raising its game and prepared for responsible participation in global finance.