A global dirty money watchdog on Friday placed Iran on its blacklist for "failing to comply with international anti-terrorism financing norms".
The decision comes after more than three years of warnings from the Paris-based Financial Action Task Force (FATF) urging Tehran to enact terrorist financing conventions.
However, the FATF appeared to leave the door ajar for Iran, saying “countries should also be able to apply countermeasures independently of any call by the FATF to do so”.
It will mean more scrutiny of transactions with Iran, tougher external auditing of financing firms operating in the country and add pressure on the few banks and businesses still operating with Iran.
Foreign businesses say Iran’s compliance with FATF rules is key if Tehran wants to attract investors, especially since the United States re-imposed sanctions on Iran in 2018 after withdrawing from a 2015 nuclear deal with Iran and other world powers.
Washington has since pushed a policy of “maximum pressure”, saying a broader deal should be negotiated on nuclear issues, Iran’s missile programme and Iranian activities in the Middle East.