Regulators tightening scrutiny of Iran over terror financing

US Treasury Secretary Steven Mnuchin, shown in this May 22, 2019 photo, called out Iran's "willful failure to address its systemic money laundering and terrorist financing deficiencies"  (AFP Photo/SAUL LOEB)

Washington (AFP) - A multinational task force said Friday it is keeping Iran on a financial blacklist for failing to take action to head off funds flowing to terrorists.

The 38-nation Financial Action Task Force (FATF) said it will require more onerous financial oversight if Tehran fails to meet an October deadline for improving its controls.

"The FATF expects Iran to proceed swiftly in the reform path to ensure that it addresses all of the remaining items," according to the statement, while welcoming "high-level political commitment" to repair the deficiencies.

Treasury Secretary Steven Mnuchin in a speech Friday called out Iran's "willful failure to address its systemic money laundering and terrorist financing deficiencies."

The country has faced a growing series of US economic sanctions over the past year, as Treasury has blacklisted numerous firms and officials to choke off their access to funds following President Donald Trump's decision to abandon the 2015 nuclear deal negotiated by his predecessor.

Amid rising tensions in recent days after Iran shot down an American drone, Trump early Friday appeared to preview the tougher stance, saying on Twitter that "Sanctions are biting & more added last night."

However, no sanctions were announced.

The FATF said steps that Iran still must take include "adequately criminalizing terrorist financing," "identifying and freezing terrorist assets," and ensuring financial institutions verify wire transfer information.

The task force also called upon all members "to require increased supervisory examination for branches and subsidiaries of financial institutions based in Iran."