|
The Iranian regime appears to be trying to mitigate internal economic pressure by taking steps to remove itself from the Financial Action Task Force (FATF) blacklist, which currently hampers Iran’s access to the international financial system. FATF is the global body that sets international standards to combat money laundering and terrorist financing. The FATF blacklisted Iran in February 2020 for failing to implement anti-money laundering and counter-terrorist financing policies. An FATF blacklist designation requires all FATF member states to sanction and restrict international financial interactions with Iran. The Iranian Expediency Discernment Council approved Iran’s accession to the Combating the Financing of Terrorism (CFT) convention on October 1, which is the final convention required for Iran to exit the FATF blacklist. The Expediency Discernment Council approved Iran’s accession to the other required convention, the United Nations Convention against Transnational Organized Crime, in May 2025. The CFT is a set of international policies and measures that prevent terrorist groups from accessing and using financial resources. The Expediency Council is an administrative assembly appointed by the Supreme Leader to resolve differences between the Iranian Parliament and the Guardian Council. Sadegh Amoli Larijani, who is Supreme National Security Council Secretary Ali Larijani’s brother, heads the Expediency Discernment Council. Amoli Larijani has historically opposed Iran joining the FATF, but Ali Larijani and other pragmatic figures, such as former President Hassan Rouhani, have supported taking actions to remove Iran from the FATF blacklist. Iranian President Masoud Pezeshkian previously stated in September 2024 that his government has “no choice but to resolve FATF” and emphasized that addressing the FATF designation is essential to improving Iran’s economy. It is very unlikely that Iran will halt financial support for the Axis of Resistance, which makes its removal from the blacklist doubtful even if it has adopted international treaties on transnational crime and terrorist financing. Iranian officials have repeatedly framed support of the Axis of Resistance as a core national security policy.
The Expediency Discernment Council may have also advanced CFT accession to calm Iran’s domestic markets, which have faced sharp currency depreciation following the reimposition of UN Security Council snapback sanctions on September 27. The European Union (EU) also reimposed sanctions on Iran on September 29 that it had lifted under the 2015 Joint Comprehensive Plan of Action (JCPOA). Several Iranian officials framed the reimposition of snapback sanctions as “psychological warfare” against Iran and downplayed the sanctions’ economic impact. These remarks come after four unspecified Iranian officials and two unspecified “insiders” told Reuters on September 27 that the reimposition of sanctions will deepen Iran’s economic isolation and fuel public anger. The Iranian rial lost 14.5 percent of its value after the E3 (the United Kingdom, France, and Germany) triggered snapback sanctions on August 28, falling from 1,013,000 rials to a US dollar to its lowest value at 1,160,000 rials on October 1.
The US Department of Defense announced on September 30 that it reduced the US military presence in Iraq. The United States and Iraq agreed in September 2024 that hundreds of US forces would withdraw from Iraq by September 2025 and that remaining forces would withdraw by the end of 2026. The Department of Defense said that the mission reduction is “an effort to transition to a lasting US-Iraq security partnership.” An unspecified US official told Reuters on September 30 that the United States will reduce its military personnel from 2,500 to less than 2,000, most of whom will be redeployed to the Iraqi Kurdistan Region from federal Iraq. The official added that the United States is in the process of transferring control of Ain al Asad Airbase in Anbar Province to the Iraqi federal government. A Shia Coordination Framework member said on October 1 that the framework “welcomes” the Department of Defense’s announcement. The Shia Coordination Framework is a loose coalition of Iraqi Shia parties, most of which Iran backs. A US Embassy in Baghdad spokesperson characterized the force reduction as a transition to a “more traditional bilateral security partnership.” Iranian-backed Iraqi militias have repeatedly threatened to attack US forces if the United States postpones its military withdrawal from Iraq. Iranian-backed Iraqi militias have not responded to the Department of Defense’s announcement at the time of this writing.
|
