Pat Dollard | Young Americans

PARIS - The United States and other members of an international watchdog group called Thursday for new financial pressure on Iran, saying its Islamic regime hasn’t done enough to fight money laundering and terrorism financing.

The Financial Action Task Force, in a statement from its annual meeting in Paris, pressed its 34 members to advise banks to monitor their dealings in Iran and urged nonmember nations to follow suit.

“It’s tightening the screws,” said Daniel Glaser, the top U.S. envoy to the Paris meeting, and the Treasury Department deputy assistant secretary for terrorist financing and financial crimes.

“What it’s going to mean is that financial institutions around the world are going to take a closer look at their transactions involving Iran,” he said.

The statement signals increased concern about legal loopholes that make the Islamic republic a risk. But the task force also welcomed efforts by Iran, acknowledging it has sought the agency’s advice on improving its laws.

The stepped-up call for vigilance comes against the backdrop of intense pressure from some Western nations on Iran over its nuclear program amid fears that it could be masking plans to build bombs. Tehran insists that its ambitions are peaceful and that it is developing its nuclear capabilities to generate electricity.

The task force has no enforcement power and relies on its member states to pressure their financial institutions to examine their transactions more closely, which can drive up their costs.

The task force includes 32 nations—including the U.S., China, Russia and much of Europe—as well as the European Union and the Gulf Cooperation Council. Iran is not a member, and was not represented at the Paris meeting.

In October, the task force asked member countries to advise banks to inspect their dealings with Iran more closely. The agency said gaps in Iranian law cause a “significant vulnerability” in the global financial system, and urged banks to use extra caution in dealing with Iran’s financial institutions.

But some task force members did not abide by that call—and Thursday’s statements were aimed partly at getting them to renew their commitments, officials said.

Last week, the Iranian parliament passed a law creating a council to apply the task force’s recommendations. But its officials say the law did not go far enough.

“Iran has, to our knowledge, no law in place at the moment dealing with terrorist financing,” the task force’s executive secretary, Rick McDonell, said. “It has one in relation to money laundering—very recently—but that’s deficient.”

The task force also said it was worried about Uzbekistan. It said the central Asian country risks becoming a channel for money laundering and terror financing, and warned that a governmental decision there last week effectively repealed its reporting of suspicious financial transactions.

(AP)