Criminalisation of terrorism financing in Iranian law

Abstract

Purpose The purpose of this study is to demonstrate that to what extent the Iranian criminalisation of terrorism financing meets the international standards of counter-terrorism financing regime, particularly the Financing Convention and the Financial Action Task Force (FATF) Recommendations, and what is the main impediment for Iran to integrate at the international level to combat terrorism financing. Also, it tries to rate the Iranian criminalisation of terrorism financing in accordance with the FATF technical compliance rating. Design/methodology/approach This subject is analysed from an Iranian perspective by undertaking fieldwork through collecting documents in Iran and using the official documents, statements and laws, particularly the Iranian Law of Combating Financing of Terrorism (2018) from both Persian and English sources. Findings Iran’s terrorism financing offence is not completely in line with international counter-terrorism financing regime because of an exemption for the struggle of individuals, nations and national liberation movements with the aim of countering domination, foreign occupation, colonisation and racism. The Iranian support for national liberation movements is derived from the Constitutional Law that requires Iran supports the struggles of the oppressed for their rights against the oppressors anywhere in the world. As a result, the FATF Recommendation 5 (criminalisation of terrorism financing) would be rated partially compliant. Originality/value No article exists specifically on this research field. To the author’s knowledge, this paper, for the first time, examines the Iranian criminalisation of terrorism financing. It rates the criminalisation (Recommendation 5) based on the FATF technical compliance rating because no mutual evaluation has been conducted to date. The paper is useful for academicians, law enforcement, policymakers, legislators and researchers.

A critical analysis of Somalia’s current antimoney laundering and counter financing of terrorism regime: a comparative study with Malaysia

“…For example, almost two decades ago, Johnston and Carrington (2006) noted that financial institutions, particularly the banking sector, were under increasing pressure to improve their compliance with integrity-related standards. Compliance failures have raised debates about financial inclusion and exclusion, with concerns that noncompliance may lead to exclusion (Malakoutikhah, 2020a(Malakoutikhah, , 2020b. Jensen and Png (2011) identified three factors hindering compliance with FATF's recommendations in developing countries: the complexity of the recommendations, limited implementation capacity and competing national priorities.…”

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“…Two cases were cited, Riggs Bank and Citigroup, which were heavily sanctioned by regulators in the USA, Japan and Britain. Arguably, if similar measures are enforced in developing countries, they may block financial accessibility of poor people in remote areas, or result people's turn to less-regulated systems like remittances and MSBs, prompting regulators to watch them more closely (Malakoutikhah, 2020a(Malakoutikhah, , 2020b.…”

“…Second, in terms of reporting suspicious transactions, Malaysia has examiners overseeing financial institutions' integrity, whereas Somalia's statute does not mention examiners. Both countries are part of the 1999 financial convention, which requires reporting of complex, unusual large transactions and transactions without apparent lawful economic purposes (Malakoutikhah, 2020a(Malakoutikhah, , 2020b. However, Somalia's statute does not address disclosure on reports and investigation, whereas Malaysia's statute imposes fines and imprisonment for disclosing investigations and reports.…”

Perception versus reality: Iranian banks and international anti-money laundering expectations

“…Despite these criticisms and the imposition of countermeasures by the FATF to effectively insulate the international financial system against the risk of money laundering from Iran, the perception of a legal vacuum is tempered by the reality that the country has had in place significant AML laws for several decades, as well as provision for the seizure of illegally obtained assets (Malakoutikhah, 2020). These include Article 49 of the Constitution, Article 662 of the Islamic Penal Code 1996, and the Executive By-Law of the Anti-Money Laundering Act, 2009.…”