Iran Ratifies UN Treaty to Combat Terror Financing Amid FATF Blacklist Pressure

Iran has ratified the International Convention for the Suppression of the Financing of Terrorism (CFT Treaty) in a move seen as a bid to ease international isolation and gain access to the global banking system. The decision comes as President Masoud Pezeshkian’s administration seeks to align with the Financial Action Task Force (FATF) requirements and improve relations with the West.

Effort to Ease Economic Isolation

Iran’s economy has long struggled under the weight of international sanctions, particularly from the United States. Its placement on the FATF blacklist in 2020 — alongside countries such as North Korea and Myanmar — further restricted its access to international finance. President Pezeshkian, elected on a reformist platform, is seeking to rebuild Iran’s global credibility by adhering to anti-terror financing standards and promoting greater economic transparency.

CFT Treaty

The CFT Treaty, or International Convention for the Suppression of the Financing of Terrorism, is a 1999 United Nations treaty that requires signatory nations to criminalize the financing of terrorism and cooperate with each other to prevent and punish it. It establishes a legal framework for international cooperation, including sharing evidence and extraditing suspects, and mandates that parties outlaw financing terrorist acts and freeze terrorist funds.

Key aspects of the CFT Treaty

• Criminalization: Parties to the treaty are required to define and criminalize the financing of terrorism in a way that aligns with the convention.
• International Cooperation: The treaty commits states to provide each other with the greatest measure of assistance in criminal investigations and proceedings related to terrorism financing.
• Mutual Legal Assistance: It mandates that countries can’t refuse a request for mutual legal assistance on the grounds of bank secrecy.
• Evidence Sharing: Parties are required to assist each other in obtaining evidence and can share information to establish criminal, civil, or administrative liability.
• Entry into force: The treaty was adopted in 1999 and entered into force in 2002.

Domestic Debate and Political Divide

The ratification has triggered strong opposition from Iran’s ultra-conservative factions. Critics argue that joining the convention could expose sensitive economic and military information to foreign powers, potentially undermining Iran’s regional alliances with groups such as Hamas, Hezbollah, and the Houthis. Reformists, however, see it as essential for restoring trade links with allies including Russia and China, and for mitigating the impact of sanctions on the economy.

Related GK Facts

• The Financial Action Task Force (FATF) was established in 1989 by the G7 to combat money laundering and terrorism financing.
• Countries on the FATF blacklist face restrictions on international financial transactions and reduced foreign investment.
• North Korea and Myanmar are the other countries currently listed as high-risk and non-cooperative jurisdictions by FATF.

International Response and Future Prospects

Reports suggest an Iranian representative attended an FATF meeting in Paris for the first time in six years, hinting at renewed diplomatic engagement. Nonetheless, Iran’s removal from the FATF blacklist remains uncertain, as broader international sanctions — recently reinforced by the United Nations in September — continue to restrict its financial and trade activities.