The long-debated issue of Iran’s acceptance of the rules of the international financial watchdog FATF (the Financial Action Taskforce) has resurfaced with prospects of new talks with the United States given Joe Biden’s projected victory in the US presidential elections.

Iranian hardliners have launched a media blitz against those, including President Hassan Rouhani, who say the country’s economic interests require meeting FATF criteria to leave a ‘blacklist’ imposed by the Paris-based inter-governmental organization. The proponents of FATF accession say that even if US sanctions are reduced, Iran’s economy and trade will be stifled by banking restrictions resulting from FATF’s negative classification of Iran.

The Financial Action Task Force, after years requesting Iran introduce legal and other reforms to combat money-laundering, corruption and financing of ‘terrorism,’ earlier this year put the country on its list of the most problematic states. The only other country sharing the ‘honor’ is North Korea. All FATF members – who host most of the world’s financial centers – are required to exercise enhanced diligence and counter-measures against blacklisted states.

In 2017, the freshly re-elected president Rouhani proposed four pieces of legislation to parliament, the Majles, to address FATF’s demands. After more than a year of discussions, the Majles finally approved watered-down versions of the bills, which as constitutionally required went to the Guardian Council (GC) for approval. After months of back-and-forth between parliament and GC, two bills were approved but two – concerning ‘terrorism-financing’ and money laundering – have remained in limbo.

With Biden’s victory and the prospect of renewed international talks, Iran’s reformists and centrists anticipate that the US and Europe would make the FATF rules an issue and argue that problem should be addressed. Sensing an unfavorable momentum, principlists have countered this week, arguing in the media either that acceding to FATF regulations is not important for Iran’s economy, or that FATF accession should be part of any new talks and used as leverage rather than conceded in advance.

Tasnim and Mehr news agencies, reflecting the views of conservatives and the Revolutionary Guards (IRGC), in separate articles on November 13 attacked the proponents of FATF with variants of these arguments. The Rouhani government’s argument has long been that FATF accession is needed for effective access to international banking and financial systems, for the viability of Iran’s non-oil trade, and for attracting investment from international companies as and when sanctions ease.

Officials of the Rouhani administration and reformists some have accused conservatives of a vested financial interest in thwarting transparency and anti-money-laundering laws. Foreign Minister Mohammad Javad Zarif said in November 2018 that some opposing the FATF were profiting from money laundering to the tune of billions of dollars. But to approve the bills, hardliners - including those on the Guardian Council - would need a signal from Supreme Leader Ali Khamenei, and he has expressed clear distrust of FATF.