Iran ratifies UN convention against terror financing in bid to rejoin global financial system

Iran has officially ratified a law to join the United Nations International Convention for the Suppression of the Financing of Terrorism (CFT), state media reported on Wednesday — a move aimed at restoring its access to international banking, easing trade restrictions and providing relief to its sanctions-battered economy.

Step toward FATF compliance

The decision marks a key effort by President Masoud Pezeshkian’s administration to align with the requirements of the Financial Action Task Force (FATF) — the intergovernmental watchdog combating money laundering and terrorist financing.

“President Masoud Pezeshkian has promulgated the law on the Islamic Republic of Iran’s accession to the International Convention for the Suppression of the Financing of Terrorism,” reported the Tasnim News Agency.

Iran was placed back on the FATF blacklist in 2020, alongside North Korea and Myanmar, after years of stalled reforms. The country’s blacklisting, combined with sweeping US-led sanctions, has left Iran financially isolated, restricting its ability to conduct cross-border banking and international trade.

Economic hopes amid sanctions

Reformist lawmakers and moderate figures in Tehran see joining the convention as vital to reconnecting with the global financial system. They argue that FATF compliance could help facilitate trade, even with allies like Russia and China, and attract foreign investment.

Lawmaker Mahdi Shariari said earlier this month that Iran’s lack of membership in the FATF and CFT had “created difficulties in trade, including with key allies Russia and China,” according to the ILNA news agency.

However, analysts note that international sanctions remain the main obstacle to Iran’s financial recovery, meaning that FATF compliance alone will not bring immediate economic relief.

Political divide over the move

The ratification follows weeks of fierce debate in Iran’s parliament.
Ultra-conservative factions opposed the move, warning it could expose sensitive economic and military data to Western nations and undermine Iran’s support for regional allies such as Hezbollah in Lebanon and Hamas in Palestine — both designated as terrorist organizations by the United States.

Supporters of the law counter that Iran cannot afford continued isolation, arguing that joining the CFT does not require ending its regional alliances but would make international transactions more transparent and legitimate.

Diplomatic re-engagement

Local media reported that an Iranian delegation attended an FATF meeting in Paris for the first time in six years, signaling Tehran’s intent to re-engage with the global financial community.

President Pezeshkian, elected in 2024 on a platform of moderation and engagement with the West, has made economic stabilization and sanctions relief central to his foreign policy agenda.

“This is an essential step toward normalizing Iran’s role in global finance,” said an Iranian economist quoted by state media. “But the real challenge will be convincing foreign banks that Iran is once again a safe partner.”