Laya Joneydi, Legal Deputy to Iranian President Rouhani: Joining FATF Would Prevent U.S. Sanctions against Iran from Becoming Global Sanctions; If We Don’t Join, We Will Be Risking Our Trade Relations with Russia, China

Laya Joneydi, a legal deputy to Iranian President Rouhani, said in a December 31, 2019 interview on IRINN TV (Iran) that the current economic sanctions on Iran are harsher than they have been in the past and that joining the FATF AML/CFT conventions is likely to prevent the situation from getting worse by removing suspicion from Iran's trade deals. She said that joining the conventions would enable Iran to use national currencies and prevent the American sanctions against Iran from becoming global sanctions. Joneydi argued that an economy as large as Iran's cannot be severed from the international banking system, and she pointed out that the additional risk in banking with Iran might prevent China, Russia, and other countries that support Iran from trading with it if it does not join the AML/CFT. The interview aired few days before the killing of Qasem Soleimani.

Laya Joneydi: "The Anti-Money Laundering Convention is, in fact, the Convention against Transnational Organized Crime, which we call 'Palermo,' and the Convention on Combating the Financing of Terrorism, the CFT. Almost every country in the world is a member of these two conventions. That's nearly 200 countries. The two or three countries that are not members are us, North Korea, and several countries whose names are difficult to pronounce."

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Interviewer: "Between 2009 and 2016, we were on the black list, but we continued to have trade deals [with the world]. My question is: What is the relative advantage of joining [the conventions]?"

Laya Joneydi: "You should note that in those years, the sanctions were not as harsh as they are now. Back then, we were allowed to [export] one million barrels of oil [per day].

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"When we join and can [make deals] to a certain limit – at least with national currencies – the Financial Action Task Force [FATF] will say that our deals are not suspicious, and we will be able to conduct our deals using national currencies, in this framework. Then you will see how our expenses will decrease. The price we have to pay right now in order to conduct these deals is relatively high. Part of this is because we cannot use the dollar, you see? But if we enter the FATF black list, even regular banks will not be able to associate with us using national currencies. Besides, we should look ahead to the long term. After all, we are not meant to be under U.S. sanctions forever. Secondly, as a big country, we will not be able... Look, we are now the 20th largest economy in the world, more or less. We are in the top 10-15% in the world. Such a large economy cannot be severed from the international banking system, which is the main artery of the international economy and of trade. Even a small island with a population of 3,000 cannot do it. It can be isolated from the mainland, but not from the world's banking system, because it must conduct deals for its own purposes. We must not think that we can simply ignore this factor. We had better engage in interaction rather than turn the unilateral U.S. sanctions into sanctions by 200 countries."

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Interviewer: "Dr. Zarif clearly announced that neither he nor President [Rouhani] can guarantee that joining these conventions would resolve the problems. As someone who worked in international law and dealt with these issues, is there any guarantee that the situation will improve?"

Laya Joneydi: "Look, it will definitely prevent the situation from worsening. It is very natural. Right now, we are working with national currencies. But even banks in Russia and China have put us on notice. Being put on the black list would create a problem.

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"The Governor of the Central Bank said something interesting: 'Don't ask only for guarantees that the situation will improve. The people who say we shouldn't do it should provide guarantees that the situation will not get worse.'"

Interviewer: "But that's how we have been so far. The situation will not be worse."

Laya Joneydi: "Yes, it will. China, Russia, and the countries that support us are saying that their banks, postal services, and other credit and financial organizations that want to work with us will have a problem because the risk they [will be taking] is going to increase."