The Financial Action Task Force (FATF) said on Friday Iran will remain on its list of high-risk countries for failing to fully accept the body's rules days after Iran's conditional accession to a UN convention against terror financing.
Tehran had hoped the move would grant it greater access to the global banking system as renewed international sanctions have dented its already creaky economy.
Iranian President Masoud Pezeshkian on Wednesday ratified the country’s conditional accession to the United Nations Convention for the Suppression of the Financing of Terrorism (CFT), but only within the limits of Iran’s constitution and laws.
In a statement on Friday, the Paris-based watchdog said it “acknowledges Iran’s re-engagement with the FATF... and that it aims to address deficiencies in its AML/CFT regime.”
But, it added, “Iran has failed to address the majority of its action plan since 2016,” when it first committed to reforming its financial system.
In February 2020, following Iran’s continued non-compliance, the FATF formally blacklisted the country and called for “effective countermeasures."
“Iran will remain on the FATF High Risk Jurisdictions Subject to a Call for Action statement until the full Action Plan has been completed,” the statement said.
The watchdog said the suspension of countermeasures will only be considered once Iran ratifies and implements the Palermo and Terrorist Financing Conventions in line with the FATF standards.
In May, Iran’s Expediency Council, conditionally approved the country’s accession to the Palermo Convention, one of the two key legislative items tied to the FATF standards, alongside the CFT.
Iranian reservations not in line with FATF standards
The FATF said that in September 2025, Iran reported the ratification of the United Nations Convention against Transnational Organized Crime (Palermo), but the FATF assessed that “the reservations Iran has made to Palermo are overly broad” and that “Iran’s domestic compliance with Palermo is not in line with the FATF standards.”
Referring to United Nations Security Council resolutions over what it called Iran’s lack of compliance with its nuclear non-proliferation obligations, the FATF reminded all jurisdictions of their duty to address proliferation financing risks emanating from Iran.
The organization also urged Tehran to urgently criminalize terrorist financing “by removing the exemption for designated groups 'attempting to end foreign occupation, colonialism and racism,'" to improve mechanisms for freezing terrorist assets, and to ensure effective monitoring of unlicensed money transfer services.
Its wording quoted Tehran's own language citing support for armed groups in the region opposed to Israel. Hamas, Hezbollah, the Houthis and Iraqi militias are accused of terrorism in the West and are under strict sanctions.
“The FATF strongly encourages Iran to work with the FATF to urgently make further progress on its action plan,” the statement added in its Friday announcement.
The statement was released after the FATF plenary in Paris on October 22–24, where delegates from over 200 jurisdictions discussed mutual evaluations and global efforts to combat money laundering and terror financing.
Iran’s Financial Intelligence Unit chief, Hadi Khani, traveled to Paris to attend the meeting for the first time in six years at the group’s official invitation, state media reported.
