An Iranian arbitration body gave its approval on Saturday to an anti-money laundering bill seen as crucial to maintaining international trade and banking ties, the official IRNA news agency reported.
"The bill on amending the law to counter money laundering was approved with certain changes and will be sent to the parliament speaker to be communicated to the government," Expediency Council member Gholamreza Mesbahi-Moghadam told IRNA.
The Expediency Council settles disputes between parliament, which approved the bill last year, and the conservative-dominated Guardian Council, which vets all legislation and had rejected it.
Conservatives have argued that new legislation on money laundering and terrorist financing will provide Western powers with leverage over Iran´s economy and how it funds regional allies such as Lebanon´s Hezbollah.
But the government of President Hassan Rouhani says the laws are needed to meet demands set by by the international Financial Action Task Force (FATF), which monitors countries´ efforts to tackle financial crime.
Iran is alone with North Korea on the FATF´s blacklist -- although the Paris-based organisation has suspended counter-measures since June 2017 while Iran works on reforms. The FATF will meet again in February to discuss Iran´s progress.
Iran has been trying to implement standards set by the FATF, an inter-governmental organization that underpins the fight against money laundering and terrorist financing.
Foreign businesses say Iran’s compliance with FATF standards and its removal from the organization’s blacklist are essential if they are to increase investment, especially after reimposition of the U.S. sanctions on Tehran.
However, Iranian hardliners have opposed passing legislation toward compliance with the FATF, arguing it could hamper Iranian financial support for allies such as Lebanon’s Hezbollah, which the United States lists as a terrorist organization.
Parliament last year passed the anti-money laundering bill, one of four amendments Iran needs to implement to meet FATF requirements, but the Guardian Council, a vetting body, rejected it, saying it was against Islam and the constitution.
The move came after Ayatollah Sadeq Amoli Larijani - the chief of hardline judiciary - was appointed last week as the head of the Expediency Council. He is the brother of Ali Larijani, the speaker of the parliament.
Seven months after his harsh dismissal of parliamentary efforts to adapt FATF and other international conventions on money laundering, Supreme Leader Ayatollah Ali Khamenei seems to have warmed to the reforms, a reversal that experts say is aimed at preventing Iran’s economic collapse.
In recent months, cities have been rocked by demonstrations as factory workers, teachers, truck drivers and farmers protested against economic hardship. The sanctions have depressed the value of Iran’s rial currency and aggravated annual inflation fourfold to nearly 40 percent in November.
U.S. President Donald Trump withdrew from a nuclear deal with Iran last year and reimposed the sanctions on its banking and energy sectors, hoping to curb its missile and nuclear programs and counter its growing influence in the Middle East.
European signatories of the nuclear deal are still committed to the accord and seek to launch a mechanism, a so-called special purpose vehicle (SPV), aiming to sidestep the U.S. financial system by using an EU intermediary to handle trade with Iran.
The director general of Iran’s Strategic Council on Foreign Relations, an advisory body set up by Ayatollah Khamenei, voiced his support for the FATF-related bills on Friday.
“It is better to finalize the FATF and CFT (counter financing of terrorism regimes) in the earliest time, so the Europeans have no excuse not to implement the (SPV) mechanism,” Abdolreza Faraji was quoted by semi-official ISNA new agency.
The anti-money laundering bill is one of four pieces of legislation put forward by the government to that end. A previous bill on the mechanics of monitoring and preventing terrorist financing was signed into law in August.
Two others -- allowing Iran to join UN conventions against terrorist-financing and organised crime -- have been approved by parliament but are still being delayed by higher authorities, including the Guardian Council.
The Expediency Council currently has 38 members, all appointed by supreme leader Ayatollah Ali Khamenei.
