Foreign Investment in Oil and Gas Sectors Without Joining FATF Improbable

As long as the Financial Action Task Force, the global anti-money laundering watchdog, does not remove Iran from its blacklist, the country cannot have a say in the global oil and gas markets, an energy analyst said. Finally foreign Investment in Oil and Gas Sectors Without Joining FATF Improbable.

“Pinning hopes on attracting foreign investments without joining the global banking system is nothing more than wishful thinking,” Mahmoud Khaqani, a member of the Iranian Association of Energy Economics, was quoted as saying by ILNA.

If Iran cannot give long-term banking guarantees to international companies, it is very unlikely that they would show any interest in cooperating with Iranian firms, he added.

The official noted that the current policy of not complying with FATF regulations has isolated Iran and it cannot play any role in regional or global oil and gas developments.

“Since the onset of military conflicts between Russia and Ukraine, oil and gas exporting states, such as Azerbaijan, Turkmenistan, Kazakhstan and the Persian Gulf littoral states, have multiplied their oil and gas revenues by capturing Iran’s market share,” he said.

 

Iran’s lagging behind its competitors in the energy market

“Iran is lagging behind and losing out energy markets to rivals by adopting anti-FATF policies.”

China is negotiating with Afghanistan to produce and export oil. It has invested $20 billion in Pakistan’s petrochemical industry and $10 billion to transfer Turkmenistan’s gas to Beijing via a pipeline and the project will become operational soon.

Russia is Iran’s arch-rival when it comes to gas exports and will do anything to prevent Iran from expanding its gas network in the region.

More interestingly, Venezuelan President Nicolas Maduro has started to build up relations with US President Joe Biden’s administration and is exporting oil to the US.

 

FATF and its effective role in Iran sanctions

In an article published by the Iranian Diplomacy website, Mohammad Hossein Kebriya, a political analyst, wrote that Iran’s refusal to implement FATF standards will only play into the hands of the United States that is seeking further pretexts to build up pressure on Tehran.

“Not applying the requested reforms will assist US efforts in tightening the noose of sanctions against Iran,” he said.

The Paris-based FATF has long urged Iran to strengthen its legal framework to guard against money laundering and financing terrorism.

“The United States has imposed sweeping sanctions on Iran, but it has failed to find a legal pretext to bring other countries, including its European allies, on board. It is now trying to find a path to form a coalition against Iran. As long as Tehran remains on the international money-laundering blacklist, America will be able to advance its agenda more easily,” he said.

Foreign businesses say Iran’s compliance with FATF rules is essential if it wants to attract investors, especially after the US withdrew from the 2015 nuclear deal in 2018 and reimposed sanctions on the country.

Kebriya said the failure to approve legislations for joining FATF has made it much more difficult for Iran to circumvent sanctions and it has lost the support of its friends as well.

Published: Jan 16, 2023

 

 

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