US treasury secretary Timothy Geithner’s denunciation of Iran at last weekend’s IMF spring meetings suggests that Washington is “resistant to change” in its dealings with Tehran, Iranian economy minister Shamseddin Hosseini has said.
Geithner told the International Monetary and Financial Committee (IMFC), the IMF’s ruling body, that the US remains “particularly concerned about the risks of illicit finance emanating from Iran”. He called for “enhanced vigilance” on money laundering and financing of terror.
Hosseini told Emerging Markets in an interview that he had been “astonished” by the strongly-worded passage in Geithner’s speech, to a meeting focused on the international response to the global economic crisis.
Geithner called for the Financial Action Task Force (FATF) to cooperate closely with the international financial institutions, and singled out Iran for criticism. The international community should “implement countermeasures to protect the international financial system from the money laundering and terror financing risks emanating from Iran”, he said.
But Hosseini argued that the issue had been “irrelevant” to the IMFC’s agenda, and Geithner’s focus on it “unexpected” – especially since “in the first months of [the Obama presidency] we hear a lot about change”.
The US has campaigned for several years for international institutions to take a tough line on alleged terror financing via Iranian banks. Tehran says that money laundering is strictly forbidden in Islam and in Iranian law, and that it has tightened its regulatory regime to deal with it.
A statement delivered to the IMFC meeting on Iran’s behalf said that a recent IMF mission to Iran concluded that the Iranian authorities have made progress on anti-money laundering rules, and that the Iranian penal code includes anti-terrorism provisions.
International institutions’ behaviour has been “unfair and discriminatory”, Hosseini said. The FATF had been invited to Iran “several times”. The FATF could not be reached for comment.
The FATF’s most recent plenary meeting, in February, issued a statement that welcomed Iran’s “initial engagement with the international community” on money laundering, but expressed concern about Iran’s “failure to meaningfully address” deficiencies in its legislation. The FATF was “particularly concerned about Iran’s failure to address the risk of terrorist financing”.
Hosseini said that Geithner’s stance was “unexpected” in the context of an apparent recent thawing of attitudes in Washington. “We didn’t put forward the motto of change, but we said that we welcome it, if it’s real and honest”, he said.
“The question is whether [Geithner’s statement] is in line with change or against it. I interpret it as resistant to change. I hope the will for change is enough to stop this stubborn kind of behaviour.”
While president Obama has made positive overtures to Tehran, hawks in Washington – including the pro-Israeli lobby – are pushing for a more aggressive policy.
A bipartisan proposal went to Congress last week urging that sanctions be spread to firms that export oil products to Iran – which analysts say would quickly exact a heavy toll on the Iranian economy, analysts say.