RBI, Sebi to issue fresh warnings on Iran funds

RBI, Sebi to issue fresh warnings on Iran funds

To check flow of Iran money into the Indian banking system and capital markets, financial regulators RBI and Sebi will soon issue fresh warnings asking entities under their respective jurisdictions to remain vigilant about the entities and funds with Iranian links.

The warnings, which are expected to be issued in the next few days, would follow directions issued by a global inter-government watchdog against money laundering and terror financing activities, the Financial Action Task Force (FATF), on Iran late last month.

Iran continues to face stiff economic sanctions by the US and many European countries due to the alleged links between its nuclear programme and the suspected terror activities. India and a few other countries have been exempted from certain sanctions such as oil imports.

India being a member of FATF, which recently lauded its attempts to check money laundering and terror financing activities in the country, takes the global warnings issued by the Paris-based global watchdog very seriously and the government has forwarded its Iran advisory to RBI and Sebi for further action, a senior official said.

FATF is the global standard setting body for anti-money laundering and combating financing of terrorism (AML/CFT) and has identified Iran with “strategic deficiencies” posing  risk to international financial system.

As per FATF’s latest warning, member countries need to “apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/TF) risks emanating from Iran and North Korea.”
India has been FATF member since 2010.

FATF has also decided to remove India from its regular follow-up process to determine compliance to the global AML/CFT standards.

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