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Iran’s President Vows to Settle FATF, JCPOA Issues

In his first press conference since taking office in July, Iranian President Masoud Pezeshkian made a bold declaration to address two of the most significant issues facing Iran: its Financial Action Task Force (FATF) blacklist status and the Joint Comprehensive Plan of Action (JCPOA), commonly known as the 2015 nuclear deal. These two interconnected challenges have long hindered Iran’s economic development and international relations, with severe implications for the country’s ability to trade, access foreign capital, and improve domestic economic conditions.

Iran’s FATF Blacklisting

Iran has been blacklisted by the Financial Action Task Force (FATF) for years, a designation that has critically disrupted its financial and international transactions. The FATF is a global body tasked with monitoring and combating money laundering and terrorism financing. For Iran, being on the blacklist has meant limited access to global banking and trade, further crippling an economy already struggling under international sanctions.

In his press conference, Pezeshkian emphasized the urgency of resolving the FATF issue. “We have no choice but to resolve the FATF issue,” he stated, acknowledging the significance of lifting this designation. According to the president, resolving the FATF challenge would not only enable smoother international transactions but would also help bolster employment and investment within Iran.

Iran’s blacklisting came about largely due to its failure to meet certain international standards on anti-money laundering (AML) and countering the financing of terrorism (CFT). Previous governments have made attempts to pass necessary reforms to comply with FATF regulations, but these efforts were often stalled by internal political opposition from hardliners who viewed such compliance as a concession to Western powers.

President Pezeshkian mentioned that he would be writing to the Expediency Council, a key Iranian body that mediates disputes between the parliament and the Guardian Council, to push forward a resolution. This move could signal a new approach to tackling the issue, as Pezeshkian aims to adopt a more pragmatic stance compared to his predecessor, Ebrahim Raisi.

The JCPOA (Iran Nuclear Deal)

The 2015 nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), was once hailed as a breakthrough in international diplomacy. The agreement, signed between Iran and the P5+1 (the United States, United Kingdom, France, Russia, China, and Germany), limited Iran’s nuclear program in exchange for the lifting of economic sanctions. However, when the United States unilaterally withdrew from the deal in 2018 under then-President Donald Trump, the agreement collapsed, leading to the reinstatement of harsh sanctions on Iran.

The subsequent U.S. sanctions severely restricted Iran’s oil exports, which are a critical source of revenue for the country. Negotiations to restore the JCPOA under the Biden administration have repeatedly stalled, with both sides blaming the other for the deadlock.

Pezeshkian, who campaigned on promises of reintegrating Iran into the global economy, is now faced with the daunting task of resuming negotiations to restore the deal. His administration has signaled that it is willing to engage in talks, but Pezeshkian also recognizes the challenges, especially with Western powers skeptical of Iran’s intentions and Iran’s nuclear program advancing since the U.S. withdrawal.

“If we can solve the FATF issue, the JCPOA (Iran nuclear deal), and any kind of connection with the world, employment and investment will be created in the country,” the president said. By linking these two issues, Pezeshkian is acknowledging that resolving Iran’s financial isolation through FATF compliance is essential for the success of any broader diplomatic efforts, including the nuclear deal.

Economic Challenges and Petrol Price Increases

In addition to foreign policy concerns, Pezeshkian’s administration faces significant domestic economic challenges. He addressed these issues during his press conference, particularly the problem of economic imbalances that have worsened due to sanctions and mismanagement. One of the proposed measures to tackle these imbalances is the possible increase in the price of petrol.

“We must solve these imbalances, and we shouldn’t say that if we touch the imbalance here, there will be an outcry,” Pezeshkian said, urging the media and the public to provide constructive feedback on the matter. Any increase in petrol prices is likely to be met with public opposition, especially considering the high inflation and unemployment rates that have plagued Iran in recent years.

The possibility of raising fuel prices has been a contentious issue in Iran. In 2019, when the government attempted to triple the price of petrol, it sparked widespread protests across the country. The unrest was met with a violent crackdown, further straining relations between the government and the people. Pezeshkian, aware of the sensitivity of the issue, emphasized the need for careful handling and dialogue with the public.

Allegations of Arms Deliveries to Russia and Yemen

During the press conference, Pezeshkian also tackled international allegations that Iran has supplied arms to Russia for its war in Ukraine and to the Houthi rebels in Yemen. Western governments have repeatedly accused Iran of providing weapons, including ballistic missiles, to Russia—a claim that Tehran has consistently denied.

“I firmly say we have not given anything [missiles] to Russia because we are looking for peace,” Pezeshkian stated. He also addressed accusations that Iran had supplied hypersonic missiles to the Houthi rebels in Yemen, who recently fired a missile toward central Israel. Pezeshkian rejected these claims, stating, “There is no such thing, we don’t even have such missiles in Iran.”

Despite these denials, Iran’s involvement in regional conflicts remains a contentious issue. Iran has long been accused of supporting proxy groups across the Middle East, including in Yemen, Lebanon, and Syria. Its support for the Houthis, who are fighting a Saudi-led coalition in Yemen, has been a major point of tension with Western and regional powers.

Domestic Issues: Morality Police and Protests

A female journalist who attended the press conference raised concerns about the morality police, a force that enforces Iran’s strict hijab laws. The issue of the morality police gained international attention in 2022 after the death of Mahsa Amini, a young woman who died in the custody of the police. Her death sparked widespread protests against the government, which struggled to contain the dissent.

Pezeshkian responded to the journalist’s concerns by promising to address the issue, but he also pointed out that his government is under pressure from certain groups to maintain strict hijab enforcement. “On the one hand, they put pressure on us, but on the other we should not allow these things to happen,” he said.

The protests in 2022 were the largest in Iran since the 2009 Green Movement, and they underscored the deep dissatisfaction many Iranians feel toward the government’s policies on civil liberties and economic mismanagement. While Pezeshkian has promised to be more open to dialogue with the public, it remains to be seen whether he will be able to navigate the pressures from hardline factions within the government.

Involving the Youth in Government and Relocating the Capital

One of Pezeshkian’s key promises during his campaign was to involve more youth in government positions. At the press conference, he reiterated this commitment, stating that ministers and department heads must have “young elites” working alongside them. He explained that the younger generation would not only bring new energy to the administration but would also be trained in governance and management.

Additionally, Pezeshkian floated the idea of relocating Iran’s capital due to environmental concerns in Tehran. The city, home to over 8 million people, faces significant challenges related to air pollution, water scarcity, and seismic risks. “Unfortunately, we are developing the capital without considering resources and consumption, which is scientifically impossible to continue,” he said, stressing the need for long-term planning.

Conclusion

President Masoud Pezeshkian’s administration faces an uphill battle as it seeks to resolve Iran’s most pressing challenges, both domestically and internationally. By focusing on the FATF blacklist, the JCPOA, and economic reforms, Pezeshkian hopes to restore Iran’s international standing and improve conditions at home. However, with ongoing sanctions, accusations of arms transfers, and internal dissent, the road ahead is fraught with obstacles. How Pezeshkian navigates these issues will define his presidency and shape Iran’s future trajectory.

photo source: Google

By: Montel Kamau

Serrari Financial Analyst

17th September, 2024

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