FATF and money laundering in Iran
| Date | 02 July 2018 |
| Published date | 02 July 2018 |
| DOI | https://doi.org/10.1108/JMLC-07-2017-0033 |
| Pages | 314-327 |
| Author | Mansour Rahmdel |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
FATF and money
laundering in Iran
Mansour Rahmdel
Faculty of Law, Tehran Islamic Azad University, Central Branch, Tehran, Iran
Abstract
Purpose –The aim of this paper is considering that obtaining illegitimate property and obtaining property
illegallyis morally outrageous. Thelaw also condemns itas a crime. The act of thosewho launder the proceeds
of crime is also condemned. This condemnation is almost universal. So, money laundering as a way of diversion
of the origin of the illegal gains into legitimate currency or other assets has been criminalized in most of the
countries, including in Iran. Before criminalization of money laundering, there were different laws which referred
to the case without referring to the term of money laundry. According to Article 49 of the Iranian Constitution
“all proceeds of illegal sources like embezzlement, bribery, gambling and other ways should be confiscated.”
Design/methodology/approach –Article 662 of the Islamic Penal Code (IPC) ratified in 1996
criminalized dealing with the proceeds of theft and Note 2 of Article 119 of the Penal Code of the Armed
Forces criminalized obtaining the proceeds of embezzlement. But, in 2008, to follow the international
conventions, especially Article 3 of the psychotropic substances 1988 in Vienna and also Financial Action
Task Force (FATF) recommendations on Money Launderingand Terrorism Financing, the legislator ratified
the anti-money laundering code (AMLC). The methodology is an analytical one. The author using an
analytical method, has analyzed the subject with consideration of Iran’s situation, as well as international
documentsand FATF’s recommendations.
Findings –The author has studied the issue, believing that domestic regulations of Iran comply with
international regulations and FATFrecommendations. The current paper considers the different aspects of
the AMLCs in Iran in relationto FATF recommendations.
Originality/value –The author confirms the originalityof the paper and declares that he has referred all
the other materials.
Keywords Iran, Money laundering, FATF, International conventions
Paper type Research paper
Introduction
Obtaining money illegally or obtainingillegitimate money is almost universally condemned
and criminalized[1]. Everyone should earn through a legitimate way, as the acquisition of
illegitimate property collapses the cohesion of society. Acquiring money outside the
framework of the law will spread corruptionin society:
“Corruption has an insidious effect on development, but the effects are far subtler and more
complex than a traditional analysis based on western ideas of the nation state would indicate.”
(Glanville, 2015) and “distorts markets and competition, breeds cynicism among citizens,
undermines the rule of law, damages government legitimacy, and corrodes the integrity of the
private sector”(Ethan and Holland, 2009).
The principle is based on the legitimacy of ownership and the contrary must be proved.
Burden of Proof of the contrary lies with the claimant.In civil cases, in which the act is not a
crime, the claimant is the plaintiff, but in criminal cases, the claimant is the public
prosecutor. Iranian Constitution has referred to it in Articles 46 and 47. So, if theprosecutor
proves that the property is illegitimateor has been gained illegally, it should be confiscated.
Article 49 has explicitlyreferred to it. According to it:
JMLC
21,3
314
Journalof Money Laundering
Control
Vol.21 No. 3, 2018
pp. 314-327
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-07-2017-0033
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