Iran’s Expediency Discernment Council (EDC) has rejected a bill proposed by President Hassan Rouhani’s Administration to amend a law concerning money laundering.

The proposal, which is a part of four bills known as “Palermo bills” in Iran, was aimed to pave the way for Tehran to get out of Financial Action Task Force’s (FATF) list of suspect countries.

Rouhani’s administration on November 8, 2017 tabled four bills for the parliament’s approval -- the Financial Action Task Force (FATF), the United Nations Convention Against Transnational Organized Crimes (UNTOC), Combatting Financing Terrorism (CFT), and the United Nations Office of Drugs and Crimes (UNODC) -- in the hope of reducing international pressure on Iran’s deteriorating economy.

The bills are proposed to mitigate increasing pressure on Tehran, while the 2016 Basel Anti-Money laundering (AML) Index has identified Iran as the highest money-laundering risk out of 149 countries surveyed.

Iran has until October to adopt the financial reforms proposed by FATF as part of efforts to improve Iran’s ability to interact with the international banking and trade system.

Nevertheless, EDC says joining FATF is against Iran’s high policy of “resistance economy”, “food security”, “economic security” and “encouraging investment”.

Ten days after parliament initially approved the bill concerning UNTOC, Khamenei personally stepped in on June 20 and called the bill “unacceptable.”

Taking its cue from the Supreme Leader, Iran's Guardian Council (GC) rejected the bills on August 17. The GC is constitutionally tasked to review legislation passed by parliament and give its seal of approval.

According to Khamenei, UNTOC had been “cooked up” by foreign powers and the parliament should shelve it.

“It is not necessary to join conventions the depths of which we are unaware of,” he said, proposing instead that the parliament create its own laws to combat money laundering and terrorism funding rather than join an international convention.

Conservative allies of Khamenei believe that approval of the Palermo Bills might jeopardize Iran’s financial assistance to what they describe as the “resistance front," including Hamas and Lebanese Hezbollah.

EDC’s opposition to FATF was relayed to the Guardians Council in a letter written by its chairman, Ayatollah Mahmoud Hashemi Shahroudi, Fars, a news agency affiliated with the Islamic Revolution Guards Corps (IRGC) reported on Sunday, September 9.

Meanwhile, those who support the bills, including the speaker of Majles (parliament), Ali Larijani, President Rouhani and his moderate-reformist allies have accused the opponents of being afraid of economic transparency and combatting financial corruption.

Implementing guidelines proposed by FATF in entities such as the National Iranian Oil Company (NIOC), Central Bank of Iran (CBI)and Central Insurance Organization could be hazardous for Iran in coming situations, Ayatollah Shahroudi has argued in his letter to the GC’s chairman, 91-year old Ayatollah Ahmad Jannati.

However, President Rouhani’s deputy for legal and judicial affairs, Hossein Ali Amiri, has argued that according to the Islamic Republic’s Constitution, EDC has no legal authority to make decision on issues related to national security.

“When it comes to weighing national security affairs, they should be referred to the Supreme National Security Council (SNSC),” Amiri has reiterated.

Based on Iranian law, SNSC is always chaired by the incumbent President.

The EDC normally does not interfere in legislative affairs. But in cases where parliament and the Guardian Council reach a deadlock, EDC occasionally acts to find determine what is "expedient" for the regime.

Though the bills are not directly tied to talks between the EU and Tehran to keep the Joint Comprehensive Plan of Action (JCPOA), or Iran nuclear deal with world powers, alive, an MP, Alireza Beigi has cited the deputy foreign minister of Iran, Abbas Araghchi, as admitting that their approval would help the Iranian side in its negotiations with Europe.

While FATF does not have the authority to impose sanctions, a country blacklisted by the world’s financial watchdog will face severe pressure in its economic ties with the rest of the world.

Iran has been on the blacklist of FATF since 2009, but the international organization has suspended Tehran from the list during the past two years, giving the country the chance to lay the groundwork for joining international conventions against money laundering and financial assistance to terrorism.