Money laundering involves the concealment of illicit proceeds derived from criminal activities, making it difficult to trace and detect the underlying crimes. Criminals perpetuate further harm by utilizing these illicit funds to expand their illegal operations. Countries face significant challenges in combating money laundering to prevent the proliferation of such criminal activities. The Islamic Republic of Iran recognizes the risks associated with money laundering and has implemented Anti-Money Laundering (AML) laws and regulations to address this issue.

The financial regulator in Iran is the Central Bank of the Islamic Republic of Iran (CBI), which is responsible for overseeing and supervising banks and financial institutions. The CBI plays a crucial role in safeguarding the Iranian financial system and preventing it from being exploited for financial crimes. To combat money laundering, Iran enacted its Anti-Money Laundering Law on February 6, 2008. This law encompasses the definition of money laundering as a criminal offense and establishes measures to prevent and deter such illicit activities. The CBI, through its regulatory framework and enforcement mechanisms, aims to protect the integrity of the Iranian financial system.

Know Your Customer (KYC) and Customer Due Diligence (CDD)

Before opening an account or conducting transactions for a customer, organizations are obligated to identify and verify the customer’s identity. They assess the customer’s risk level by conducting necessary checks. High-risk customers pose potential threats to organizations, so specific Anti-Money Laundering (AML) control processes must be implemented for them.

AML Compliance Officer

Organizations are required to appoint an AML Compliance Officer to ensure the organization’s adherence to AML regulations. Compliance officers stay updated on relevant regulations and fulfill AML requirements. They oversee the organization’s commitment to AML policies. AML compliance officers are responsible for detecting suspicious transactions and reporting them to the appropriate Financial Intelligence Units (FIUs).

Reporting

The AML compliance officer assumes the responsibility of preparing Suspicious Activity Reports (SARs) for suspicious transactions. Additionally, any customer transactions exceeding 150 million Iranian Rials must be reported by the AML compliance officer to the designated units.

Record Keeping

Organizations must maintain all necessary documents in accordance with legal requirements. Regulatory and supervisory entities have the authority to access these records as needed.