In The Name Of GOD

1. In The Name Of GOD

2. Islamic Republic of IRAN’s Country Report: Evaluation On Current Situation Of Anti-Corruption 10th ASOSAI Research Project (AUDIT TO DETECT FRAUD AND CORRUPTION) “Evaluation of the fight against corruption and money laundering” By: Mahdi Rezaei Represented of Iran

3. This Presentation, Concludes: Introduction Gained Results from Evaluation On Current Situation Of Anti-Corruption

4. 10th ASOSAI Research Project - Iran Having returned back from the 2nd meeting of the 10th ASOSAI Research Project in Ho-chi minh City, Vietnam, we witnessed very good interaction among research project members including colleagues who are involved in this project.

5. 10th ASOSAI Research Project - Iran Considering the approved framework for action in the 1st meeting of the 10th ASOSAI Research Project, our team started to contact with the relevant Iranian institutions and organizations involved with the fight against corruption and money laundering.

6. 10th ASOSAI Research Project - Iran Also, According to the work plan, we received a precious proposal questionnaires from Turkey, Vietnam, India, Russia, Iraq, China, Indonesia, Philippine, Malaysia and Thailand at the right time period of the project and we extracted the final questionnaires and sent them to all members at Jun, 2nd 2013 to all project members, according to time table.

7. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART I: NATIONAL ANTI-CORRUPTION STRATEGY AND ACTION PLANS 1. Iran has Stand-alone anti-corruption programme or anti-corruption strategy. 2. These following chapters, covered in the anti-corruption document in Iran: • Level of implementation of previous strategy. • Objectives and priority areas. • Chapters on prevention and criminalization / law-enforcement measures.

8. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART I: NATIONAL ANTI-CORRUPTION STRATEGY AND ACTION PLANS 3. Iran’s anti-corruption strategy have an action plan. 4.These following elements are contained in the Anti-corruption action plan in Iran: • Specific measures for each objective. • Specific institutions responsible for the implementation of each measure. 5. Anti-corruption documents and action plans, are publicized.

9. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART I: NATIONAL ANTI-CORRUPTION STRATEGY AND ACTION PLANS 6. These following measures has employed in fighting corruption in Iran: • Administrative reforms, • Development and enforcement of the code of conduct and the code of professional ethics, • Penalty forms to heads of the agencies in case of occurrence of corruption, • Salary payment via bank account, • Declaration of assets and income and • Regulation of returning gift by the public officials.

10. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART II: ANTI-CORRUPTION AGENCY 7. Iran has an anti-corruption agency (ACA) or a specialist authority for anti-corruption. 8. These are the main responsibilities/functions of the ACA in Iran: • Monitor and evaluate the implementation of the anti-corruption strategy, • Collect, centralize and exploit the denunciations, • Identify the causes of corruption and to propose to the competent authorities of measures to help eliminate it, and • Anti-corruption screening of legal acts.

11. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART II: ANTI-CORRUPTION AGENCY 9. Our ACA sometimes re-evaluate bodies/ areas/ activities having high risk of corruption in order to employ appropriate measures to mitigate corruption. 10. Our ACA established a hotline and a website in order to facilitate citizens to complain of corruption actions.

12. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART III: LEGAL BACKGROUND 11. Iran, criminalizes different types of corrupted activities by various laws with certain provisions concerning corruption. 12. In the following types of corruption, my country needs to enact new legislation to better prevent and detect the relevant cases of corruption: • Influence peddling and, • Nepotism.

13. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART III: LEGAL BACKGROUND 13. We rank from 1 to 3 (most to least) the following types of measures against corruption based upon our experience in Iran: (1) Preventive policies and measures, (2) Detective actions, (3) Punitive measure. 14. We don’t have formal political parties to governing the financing them. 15. Iran has laws and regulations governing code of ethics of public officials. 16. Iran has laws and regulations governing declaration of assets by public officials.

14. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART III: LEGAL BACKGROUND 17. Iran has “accounting and auditing standards” for both public and private sectors. 18. In Iran, public officials have legal obligation for public officials to report corruption-related offence. 19. In Iran, we rate the implementation of the rules/regulation in combating corruptions in Fair level.

15. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART IV: INTERNATIONAL COOPERATION 20. Iran, has been ratified United Nations Convention against Corruption (UNCAC). 21. Iran has begun the UNCAC peer review process. 22. Iran is one of the members of some anti-corruption conventions, initiatives or international project (OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; GRECO etc.).

16. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART IV: INTERNATIONAL COOPERATION 23. In Iran’s anti-corruption experience, we think about the success level of international cooperation as bellow:

17. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART V: PROMOTING AWERENESS AND OTHER MATTERS 24. The effect of media in fighting corruption: To some extent, media have helped public to recognize the real situation of corruption. 25.In Iran, the society (including socio-political organizations, socio-professional organizations, citizens…) are participate in tackling corruption, actively but not effectively. 26. The level of anti-corruption efforts in my country at the present time in comparison with those in past years is slightly higher than past years. 27.Iran , provides anti-corruption educational/training programs for the Public officials and General public.

18. ASSESSMENT OF CURRENT SITUATION OF ANTI-CORRUPTION PART V: PROMOTING AWERENESS AND OTHER MATTERS 28. In our opinion, because Corrupt people are not severely punished, the result of the fight against corruption is inhibited. 29. We think that the result of the current fight against corruption, have not had evident impact nowadays but will have in the future. 30. In Iran, we give the role of citizen participation in fighting corruption as table bellow:

19. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART I: LEGAL FRAMEWORK • Money laundering a criminal offence in Iran. • There are specific laws and regulations in place covering anti-money laundering in Iran. • We think that the law could cover all money laundering aspects to deal with this phenomenon. • We rate the implementation of anti-money laundering law in very goodlevel. • There is a national Financial Intelligent Unit (FIU) functioning as national center for the collection, analysis, and dissemination of information regarding potential money laundering offences

20. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART II: AML BOARD / AUTHORTY 6. There is an official authority / board in our jurisdiction that takes in hand on anti-money laundering in Iran. 7. These following measures of anti-money laundering that our agency apply effectively: • Identify customer and update customer information (identification of customer; classification of customer based on risk level…) • Report, provide and save information (report on great value transaction; report on suspicious transaction)

21. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART II: AML BOARD / AUTHORTY 8. Our anti-money laundering board / authority enjoy independence in following aspects in Iran: • Legally • Financially • Recruitment of employees.

22. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART II: AML BOARD / AUTHORTY 9. Iran’s anti-money laundering board/authority perform following functions: • Developing policies and improving legislation. • Data collecting, analyzing, evaluation. • Supervision. • Coordination. • Carry out researches, conducting sector-based studies etc. • Requesting any kind of information and documents from public institutions and organizations, natural and legal persons, and unincorporated organizations. • Exchange information and documents with counterparts in foreign countries.

23. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART II: AML BOARD / AUTHORTY 10. The effectiveness of the following types of measures concerning anti-money laundering based upon our experience in Iran from (most to least) is as follows: - Preventive policies and measures (regulations, internal control systems, international cooperation for deterrence, raising awareness) • Detective actions (prosecutions, investigations, audits etc.). • Punitive measure (Implementingcriminal and disciplinary sanctions etc.) 11. It is possible for our citizens to inform (denounce) the Iran’s AML Board about a suspected case of money laundering via website of the AML Board. 12. There are updated rules and information about the process of anti-money laundering in our country.

24. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART III: FINANCIAL ISTITUTIONS 13. Our country’s AML board requires all financial institutions to have anti-money laundering (AML) & Know Your Customer (KYC) procedures 14. Our financial institutions (banks etc.) have the following legal obligations to comply with concerning anti-money laundering law in Iran: - Internal controls and procedures to comply with regulatory framework concerning AML - Thorough client identification - Having an anti-money laundering officer - Client due diligence procedures - Risk focused assessment of customer base and their transactions

25. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART III: FINANCIAL ISTITUTIONS - Creating and regularly updating a list of red flags concerning AML - Prohibition of anonymous accounts - Employee training programs regarding AML - Independent audit/compliance function - Identification and reporting of suspicious activities to the appropriate authorities - Monitoring program for suspicious or unusual activities - Policies covering relationships with politically exposed persons consistent with industry best practices - Policy prohibiting accounts/relationships with shell banks - Policy of protecting employees who report any suspicious transactions

26. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART III: FINANCIAL ISTITUTIONS 15. Our financial institutions (banks etc.) obliged to comply with the following legal obligations or administrative policies in terms of client due diligence procedures in Iran: • Implementation systems for the identification of its customer, including customer information in the case of recorded transaction, account opening, etc. • Collecting information and assessing its customer’s AML policies and practices. • Screening its customer’s information against sanction lists issued by the government or international bodies.

27. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART III: FINANCIAL ISTITUTIONS 16. The most common type of suspicious transaction reports (STR) from financial institutions in Iran is in times that we see unusually large cash transactions. 17. The financial institutions obliged to comply with FATF recommendations in Iran.

28. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART IV: INTERNATIONAL COOPERATION 18. We think that our organization ability to cooperate and exchange financial information at international cooperation are in good level. 19. Iran has cooperation agreements and protocols to share financial information and financial transfers if it’s involved with money laundering

29. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART V: Education, Awareness and Other matters 20. We give these following roles to citizens in fighting money laundering:

30. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART V: Education, Awareness and Other matters 21. We think that the punishments of money laundering incidents are appropriate. 22. In our opinion, the following factors inhibit the result of the fight against money laundering in Iran: • Limitation of citizen’s knowledge about money laundering criminal. • Lack of competent and experienced staff to handle money laundering cases. • Lack of capacity and financial resources of anti money laundering agencies.

31. ASSESSMENT OF CURRENT SITUATION OF ANTI-MONEYLAUNDERING PART V: Education, Awareness and Other matters 23. Our country provides anti- money laundering educational/training programs for Public officials, NGOs, Financial institutions and Business associations and private companies. 24. We think that the controlling systems are the keystone and deterrent for fighting against money laundering. 25. We have high institutions providing training workshops for the employees of controlling agencies about methods to detect money laundering. 26. As a result of the current situation in fight against-money laundering, we have had positive impact, contributed to prevent money laundering

32. For Your Attention!