Mnuchin: Iran must address 'systemic money-laundering' or face international audits

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Treasury Secretary Steven Mnuchin warned on Friday that Iran’s financial system will soon face additional penalties if the nation doesn’t comply with international guidelines to combat money laundering.

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Mnuchin’s remarks at a 2019 summit for the Financial Action Task Force, an international organization with a mandate to police money-laundering and the financing of terrorist networks, came amid escalating tensions between the U.S. government and Iran. The FATF removed Iran from its financial blacklist in 2016 after government officials agreed to implement policies that would bring its financial institutions into compliance with international standards.

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As of this month, Iran had yet to comply with the FATF’s standards. Mnuchin said further delay would result in more international audits of its financial institutions, as well as other “counter-measures” if Iran fails to act.

“The FATF responded to Iran’s willful failure to address its systemic money laundering and terrorist financing deficiencies by requiring increased supervisory examination for branches and subsidiaries of financial institutions based in Iran and calling for additional counter-measures to be re-imposed if Iran does not make further progress,” Mnuchin said.

The FATF said Iran has until October to come into compliance with international standards or it will trigger counter-measures.

Mnuchin’s comments came hours after President Trump ordered retaliatory strikes after Iran shot down an unnamed U.S. surveillance drone, only to reverse course minutes before the attack was set to occur. Trump said he withdrew the order because it was a disproportionate response to the downing of the drone.

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Trump added that “sanctions are biting” Iran’s economy and that additional penalties were “added last night.” The latter remark was a reference to the FATF’s warnings outlined by Mnuchin, a senior Treasury official told FOX Business Network correspondent Edward Lawrence.

"FATF will be announcing the increased supervisory examination, a deadline for Iran to comply with certain FATF standards, and the additional counter-measures if the deadline is not met,” the official said.

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