Experts: Iranian Anti-Terror Finance Bill Includes Exemptions to Allow Funding of Hezbollah

A recently passed bill by the Iranian parliament or Majlis, which was supposed to end the Islamic Republic’s support for terror financing, leaves huge loopholes, allowing the regime to continue funding terror groups such as Hezbollah, two experts assessed in an analysis Monday.

Though reporting on the passage of the bill typically described as “new measures against funding terrorism,” Saeed Ghasseminejad and Toby Dershowitz wrote in a policy brief for the Foundation for Defense of Democracies (FDD) that the actual bill “carves out exemptions for the specific purpose of facilitating funds to support Hamas, Hezbollah, and other groups designated abroad as terrorist organizations.”

Ghasseminejad and Dershowitz, respectively a senior advisor and senior vice president at FDD, observed that the bill contains language that excludes “struggles against colonial dominance and foreign occupation” from its definition of terrorism.

Though the bill was supposed to bring Iran into compliance with the International Convention for the Suppression of the Financing of Terrorism (CFT), in order to be removed from the Financial Action Task Force’s (FATF) blacklist, the authors write that the new bill violates the terms of the CFT.

The Iranian bill itself, according to Ghasseminejad and Dershowitz, acknowledges that it doesn’t comply with a clause in the CFT that prohibits acts that are “intended to cause death or serious bodily injury to a civilian, or to any other person not taking an active part in the hostilities in a situation of armed conflict.” The Iranian bill describes its commitment to that clause as “limited.”

The FATF is an intergovernmental body established to protect the integrity of the international financial system from money laundering, terror financing, and related threats.

The Iranian legislation also asserts that “legitimate struggle” is an exception to CFT’s requirement that member states “ensure that criminal acts within the scope of this Convention are under no circumstances justifiable by considerations of a political, philosophical, ideological, racial, ethnic, religious or other similar nature.”

In addition to these specific exceptions, the legislation asserts that no part of the CFT may override any part of Iran’s constitution. Iran has also insisted that the FATF remove it from its blacklist before fully adopting the CFT.

The FATF’s credibility “would suffer greatly if it allowed Iran’s deceptive legislation to satisfy the requirements laid out for removal from its blacklist,” Ghasseminejad and Dershowitz warned. They also wrote “that diplomatic concerns, such as a desire to incentivize compliance with the Iran nuclear deal, in no way justify lowering the organization’s standards.”

Though the FATF had temporarily suspended economic countermeasures against Iran for its violations of terror finance and money laundering activities as part of the 2105 nuclear deal, Iran was still ranked the worst violators of those norms in 2016.

At the time, Ghasseminejad and Dershowitz had observed that Iran’s definition of terrorism remained an obstacle to it being removed from the blacklist.  According to Abdolmahdi Arjmandnejad, then the Central Bank of Iran’s deputy for anti-money laundering affairs, “liberation organizations are not subject to this law and the Supreme National Security Council decides who is a terrorist.” This is very similar to the definitions in the recently passed bill.

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