Iran’s Ratification of the UN Convention for the Suppression of the Financing of Terrorism (CFT)
Context:
Iran Joins UN Convention Against Terror Financing
Iran has ratified the “International Convention for the Suppression of the Financing of Terrorism (CFT)”.
Objective: To align with Financial Action Task Force (FATF) standards and gain access to global banking systems, crucial for easing sanctions-related economic pressure.
Background
Iran has long faced U.S. and international sanctions, restricting its access to global finance.
President Masoud Pezeshkian’s administration (2024– ) aims to:
Improve ties with the West.
Meet FATF compliance norms.
Boost trade and foreign investment.
Ratification of the CFT is a key FATF requirement for countries seeking removal from the FATF “blacklist”.
About the Convention for the Suppression of the Financing of Terrorism (CFT)
Adoption and Entry into Force
Adopted by the UN General Assembly: 9 December 1999.
Entered into force: 10 April 2002.
Depositary: United Nations Secretary-General.
Objective
To criminalize the financing of terrorism and enhance international cooperation in preventing, investigating, and prosecuting such offences.
Key Provisions
Definition of Offence (Article 2):
Any person who provides or collects funds, directly or indirectly, with the intention or knowledge that they will be used to carry out acts of terrorism, commits an offence.
State Obligations:
Enact domestic laws criminalizing terror financing.
Freeze, seize, and confiscate funds linked to terrorist acts.
Exchange information and cooperate with other States in investigations.
Deny safe haven to persons involved in terror financing.
Jurisdiction:
States must establish jurisdiction when the offence is committed in their territory or by their nationals.
Extradition and Mutual Legal Assistance:
The CFT serves as a legal basis for extradition and mutual legal cooperation among member States.
Relation with FATF (Financial Action Task Force)
FATF is an intergovernmental body that sets global anti-money laundering (AML) and countering financing of terrorism (CFT) standards.
The CFT Convention provides the legal backbone for FATF’s “CFT” recommendations.
Iran’s accession to the CFT is an effort to move towards FATF compliance and regain credibility in global finance.
India’s Status
India signed the CFT Convention on 9 September 2000.
India ratified it on 22 April 2003.
India has also enacted supporting domestic laws such as:
Unlawful Activities (Prevention) Act (UAPA), 1967, amended to cover terror financing.
Prevention of Money Laundering Act (PMLA), 2002.
India is a member of FATF (since 2010) and the Asia/Pacific Group (APG) on Money Laundering.
Prelims Practice MCQ
Q. Consider the following statements regarding the “International Convention for the Suppression of the Financing of Terrorism (CFT)”
It was adopted by the UN General Assembly in 1999 and came into force in 2002.
It obligates States to criminalize the financing of terrorism and cooperate in freezing terrorist funds.
The Convention was established under the Financial Action Task Force (FATF).
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
✅ Answer: (a)
Explanation: The CFT is a UN treaty (1999), not created by FATF (which is an intergovernmental body). It aims to criminalize terror financing and strengthen cooperation.
Q. With reference to the Financial Action Task Force (FATF), consider the following statements:
FATF was established by the G7 in 1989 to combat money laundering and later expanded to include terror financing.
FATF maintains two public lists — the “grey list” and the “blacklist.”
India is a founding member of the FATF.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 only
(d) 1, 2 and 3
✅ Answer: (a)
Explanation: India joined FATF in 2010; it is not a founding member. FATF was established by the G7 in 1989 to tackle money laundering and later included terror financing post-9/11.