SAEDNEWS: An economist said: "Moving from the black to the gray group marks the start of Iran's efforts to improve financial transparency and comply with international standards."
According to Saed News qouting Etemad, Seyed Ali Madanizadeh announced on Friday evening, August 7, during a televised interview:
“After the approval of Iran’s membership in the Palermo Convention, the FATF deadlock has been resolved after seven years, and Iran has been invited for dialogue. However, changing Iran’s status from the FATF blacklist to the gray list and then to the white list requires measures in line with combating money laundering and financing terrorism.”
These measures include the ratification and implementation of the Palermo and CFT conventions, as well as cooperation with the Financial Action Task Force (FATF). At present, Iran is on the FATF blacklist, and to exit it, these measures must be taken. Currently, the Palermo Convention has been ratified by the Expediency Council, and the ratification process of the CFT convention is still underway.
FATF (Financial Action Task Force) is an international organization established to combat money laundering and terrorism financing. This organization evaluates countries and, in case of non-compliance with international standards, places them on various lists. A country on the FATF blacklist faces countermeasures from other countries, which can include financial and trade sanctions. A country on the FATF gray list is under stricter monitoring and must take measures to exit this list.
The ratification and implementation of the Palermo and CFT conventions are tools for combating transnational organized crime and terrorism financing. Iran must cooperate with FATF by providing the necessary information and aligning its domestic laws and regulations with international standards on combating money laundering and terrorism financing.
Vahid Shaghaghi-Shahri, economist and university professor, told Etemad about Iran’s removal from the blacklist:
“FATF is a non-governmental body that has been active for about a decade, dividing countries into three groups—black, gray, and white—based on financial transparency, the health of the banking system, and the absence of support for terrorist groups.”
He emphasized: “This ranking, beyond being merely technical, has wide economic and political consequences and affects the costs of countries’ financial and trade activities.”
Shaghaghi-Shahri explained that Iran being on the blacklist means the country is considered high-risk from a financial and banking perspective. He added:
“Countries in the black group, according to FATF, lack sufficient financial transparency and may be accused of supporting terrorist groups. This situation makes foreign banks and economic actors deal with Iran with greater caution, raising transaction and insurance costs.”
He continued:
“According to the experience of private sector actors, Iran’s presence on the blacklist increases the costs of trade and financial exchanges by 15 to 30 percent, and even discourages some trade partners from cooperating with Iranian counterparts.”
Shaghaghi-Shahri gave a tangible example:
“This situation is like when someone wants to buy or deal with a person who has a poor record. In such cases, the counterpart acts cautiously, asks for more guarantees, and the risk of activity increases significantly.”
He further explained:
“Moving from the black group to the gray group means starting the country’s reform measures in financial transparency and compliance with international conventions. When Iran enters the gray group, it implements most FATF requirements and shows an intention to improve its financial transparency and comply with international standards. Entering the white group requires full adherence to all FATF-declared protocols and conventions and official verification. At this stage, transaction costs decrease, and banking and trade cooperation between Iran and other countries becomes much easier.”
The economist referred to two points of contention over Palermo and CFT, saying:
“Palermo was recently ratified by the Expediency Council and will be communicated by the Parliament to the government for Iran to join the convention. However, CFT is still under review in the Council and has not been ratified.”
He continued:
“Iran’s caution in accepting CFT relates to institutions such as the Quds Force, which has been designated as a terrorist group by the United States. Joining this convention may lead to expanded sanctions and international pressure.”
According to Shaghaghi-Shahri, Iran’s experience with the NPT shows that joining treaties is easy, but leaving them is costly, and FATF creates a similar situation. He stressed:
“Even if Iran implements all requirements, moving from gray to white requires the positive vote of all 39 FATF members. With Israel’s membership and the presence of the U.S., achieving such consensus is almost impossible.”
He added:
“Crossing from gray to white is not merely a technical or legal issue but a political matter. As long as Iran’s political issues with the U.S. and Israel remain unresolved, technical and legal negotiations will have limited impact. About 70 percent of the path from black to white is political, and only 30 percent technical and legal. For this reason, even technical efforts to implement FATF protocols without resolving political issues will not yield tangible results.”
Shaghaghi-Shahri continued:
“Recent tensions between Iran, the U.S., and Israel have made moving to the white list very difficult, and even reaching the gray list is in doubt. Iran may be able to approach the gray list, but moving to the white list is nearly impossible. The decision about joining CFT and implementing FATF requirements must be made with an analysis of all political and economic dimensions, and not merely technical aspects.”
According to him, while accepting FATF and CFT may reduce transaction costs and increase financial transparency, it could also open new sanction and political cases against Iran. Therefore, simultaneous consideration of economic, technical, and political dimensions is essential, and measures based solely on technical criteria cannot guarantee success.
Mousa Ahmadzadeh, a member of the Iranian Chamber of Commerce, believes that Iran’s exit from the FATF blacklist would be a positive signal for the country’s economy.
In an interview with Etemad, he emphasized:
“This development could reconnect us to global markets. Even if the process takes time, it is still a very good sign, because after about 15 years on the blacklist, the opportunity to return to the international economic flow will now be available.”
According to Ahmadzadeh, political issues play a serious role in Iran's process of exiting the next lists, including reaching the gray list or even the white list.
He says: “If our economy remains weak and fragile, we cannot succeed either in the field of diplomacy or on the ground. But if we have a strong economy, diplomacy also gains greater power.” This member of the Chamber of Commerce emphasizes the need to change the perspective of the country’s economic managers and adds: “Those who still view the economy through the outdated rules of the past 40 years must change their mindset. We need a real paradigm shift; that is, a return to global markets, acceptance of modern economic rules, and moving along with the flow of development.”
According to Ahmadzadeh, exiting the FATF blacklist can directly affect economic costs. He states: “Currently, Iran’s financial transaction costs are between 25 to 35 percent higher than the global standard, but by exiting this situation, part of these costs will decrease, and economic enterprises can operate more competitively. If old mindsets are set aside and we align with modern global rules, we can strengthen the country’s economy and once again play a role in global markets. Economic development and the strengthening of diplomacy are two sides of the same coin, which can only be realized through a change in managerial approach.”
