Warnings to stop business transactions with Iran have been on the rise since the Financial Action Task Force (FATF) imposed sanctions on ran in February. Growing warnings have increased against transactions by companies and banks as the mullah regime has failed to comply with measures for combatting money-laundering and terrorist financing.

Toby Dershowitz, the Senior Vice President for Government Relations and Strategy at the Washington-based Foundation for Defense of Democracies (FDD), said the sanctions send a clear message to bank and corporate risk managers and others responsible for ensuring their institutions are not exposed to Iran’s illicit activities that they must reassess ties to Iran’s entire financial sector. Given Iran’s willful failure to uphold AML and terror finance standards, doing business with any Iranian bank, insurance company, or other financial institution, whether sanctioned or not, comes with heavy risks and high costs.

FDD said in a report titled “Auditing Standards for Clients Doing Business with Iran”, issued in 2017, that Iran represents a heightened risk for companies considering doing business in this emerging market.

Despite the lifting of nuclear-related sanctions, the U.S. maintains a number of non-nuclear sanctions based on Iran’s continued support for terrorism, ballistic missile development.

Iran ranked 146th out of a total 180 countries on the corruption index in 2019, according to Transparency International. Iran also ranked 178th out of a total 190 countries, according to the Doing Business report.

Iran ranked 134th out of a total 144 countries for the development of financial markets, according to the World Economic Forum’s Global Competitiveness Index.

Hany Soleiman, an expert on Iranian affairs and Director of the Arab Center for Research and Studies, said these sanctions had impacted foreign investment in Iran, citing that investment heavily relies on confidence and political stability.

“As for Iran, the regime there suffers from political and economic isolation. The domestic rallies prompted major companies to exit Iran. Some French companies could not complete their investment in Iran,” Soleiman told THE REFERENCE.

The sanctions have also affected Iran’s oil sector, which injects between $53 billion to $55 billion annually.

Iran’s oil production fell by two thirds to 250,000 barrels per day.

“The petrochemical sector has been also affected due to the sanctions, especially Iran’s exports to the Asian markets. The mining and copper sector, which accounts for 10% of Iran’s exports, has been hit hard and completely paralyzed,” he added.

Source » theportal-center