News : Economy
- Published: Wednesday, 13 March 2019
By Edward Carney
Last month, the Islamic Republic of Iran was granted an extension to its deadline for compliance with the anti-money laundering standards laid out by the Paris-based Financial Action Task Force. The expectation of that compliance was expressed in negotiations that led to the 2015 nuclear deal between Iran and six world powers. And more recently, the European signatories of that deal – the United Kingdom, France, and Germany – indicated that FATF compliance would be a prerequisite for full implementation of a plan to circumvent US sanctions, which came back into force last year after President Donald Trump announced withdrawal from the nuclear agreement.
The deadline extension was presumably motivated by the appearance of modest progress in the direction of Iran embracing the FATF provisions. But it remains an open question whether that outcome will actually be realized before the newly established deadline of June. The Iranian parliament has introduced at least four bills to address the specified international standards, but all of these have been either cancelled or delayed by hardline authorities, including the group of religious clerics seated on the Guardian Council, as well as the semi-clerical Assembly of Experts, which oversees the office of the supreme leader and will eventually select his replacement.
Submission to international will by these bodies is unlikely, especially in the midst of an apparent reassertion of their hardline identity. Radio Free Europe / Radio Liberty reported on Tuesday that Assembly of Experts elected one of Iran’s most controversial hardline clerics to serve as one of the body’s two deputy chiefs. This comes just days after that same cleric, Ebrahim Raisi, was appointed by Supreme Leader Ali Khamenei as the head of the nation’s judiciary.
That appointment was widely condemned as a demonstration of the regime’s disregard for domestic human rights. Raisi’s record includes arguably the greatest individual contributions to a massacre of political prisoners in 1988, which claimed an estimated 30,000 lives. During the summer of that year, Raisi sat on one of several “death commissions” that interrogated members of the People’s Mojahedin Organization of Iran and other opposition groups over their political views and ordered the summary execution of all those who were deemed to still be disloyal.
Among other participants in that massacre were both the current and the former Justice Ministers in the administration of President Hassan Rouhani, a purported moderate. The dual controversies related to Erbahim Raisi were preceded in the last week of February by a surprise resignation announcement from one of Rouhani’s other cabinet members, Foreign Minister Javad Zarif. But while that crisis was reportedly precipitated by his feeling sidelined in recent diplomatic affairs, the subsequent withdrawal of his resignation seemingly underlined at least a partial resolution of factional differences with the regime.
In rejecting Zarif’s resignation, Rouhani pointed to a statement by the supreme leader that described Zarif as a reliable figure on the front lines of opposition to American pressure and Western influence. Insofar as this affirms dominance over foreign policy matters by Khamenei and other hardline officials, it can be assumed to bode ill for the prospects of Iranian compliance with FATF requirements and other internationally agreed upon standards of behavior.
This conclusion was arguably strengthened on Tuesday when the National Council of Resistance of Iran pointed to some of the latest moves against FATF legislation by supporters and allies of the supreme leader. State-affiliated media outlets have reportedly seized upon Khamenei’s previous statements, namely a speech titled “Don’t waste your time with Europe” in order to poison the well in discussions over the FATF and the failure of recent legislative efforts.
As well as publishing and airing the speech in its entirety, these outlets have also commented upon it by rejecting the Rouhani government’s prior efforts to pursue a foreign policy based on negotiation, as in the case of the nuclear deal. According to Kayhan newspaper, for instance, this created a situation in which the economic welfare of the nation is now being improperly linked to FATF compliance, which Khamenei and other leading authorities nevertheless continue to reject.
It is generally understood that the Iranian government is struggling to achieve FATF compliance because hardline authorities expect it to have a strongly adverse impact on the regime’s support for a number of militant proxies in the surrounding region, most notably Lebanon’s Hezbollah. As to why that opposition would persist even in the face of specific threats of further isolation and the potential for economic collapse, the Fair Observer offered a significant clue on Tuesday.
The relevant report pointed to comments made last week by Musa Ghazanfarabadi, the head of Tehran’s revolutionary court, in which he named a number of regional militant groups that are part of Iran’s “axis of resistance” and would step in to play a role in Iran’s domestic affairs “if internal forces fail to protect the regime.”
The Fair Observer explained that this statement, which has since been tacitly embraced by other regime officials, effectively acknowledges Tehran’s fear of defections by Iranian security forces in the event of open revolt against the theocratic system. What’s more, some observers consider such revolt to be potentially imminent, given the rapid spread of anti-government protests at the end of 2017 and the beginning of 2018, which gave rise to calls from regime change in as many as 140 Iranian cities and towns.
With related protests still breaking out sporadically around the country, amplified by a deteriorating economic situation, it appears as if hardline officials have begun to regard FATF compliance as not only an undesirable compromise but also as the potential sacrifice of their last line of defense in the face of domestic challenges to the theocratic system.