Next month, the Financial Action Task Force (“FATF”) – an intergovernmental body that sets and promotes standards for combating money laundering and terrorist financing – will issue an updated public statement identifying jurisdictions that have strategic deficiencies in regards to their AML/CFT regime. Since 2008, the FATF has consistently identified Iran as a high-risk jurisdiction in consideration of the persistent deficiencies in its AML/CFT regime. Since 2009, the FATF has called on its members and other jurisdictions to apply effective counter-measures to protect their financial systems from the money laundering and terrorist financing risks emanating from Iran.

But close observers will have noticed recent subtle but important developments that could signal a change in the way that the FATF handles the issue with Iran. First, there are the steps that Iran is publicly taking to come into compliance with global banking standards, including beefing up its AML/CFT regime. This includes passage of amendments to its AML laws and the passage of a CFT law; inclusion into the Eurasian Group – an FATF associate member – with observer status; and a scheduled 2018 IMF assessment of its AML/CFT regime to adjudicate whether it has come into compliance with global norms.

Second – and perhaps most importantly – there is now a demonstrated interest from the U.S. government for Iran to make improvements to its AML/CFT regime and satisfy the technical concerns of the FATF. Recent comments from two senior U.S. Treasury Department officials evidence this interest.

Speaking at a conference last month regarding the nuclear accord with Iran and sanctions-related difficulties, Acting Undersecretary for Terrorism and Financial Intelligence Adam Szubin stated:

If Iran wants to take full advantage of its economic potential, it is up to Iran to cure systemic problems in its markets.

To its credit, Iran has publicly recognized that its financial transparency measures lag behind international standards and has begun to improve them. But it’s only just begun; problems remain.

Similarly, Daniel Glaser, the Assistant Secretary for Terrorist Financing, stated in response to a question concerning Iran’s status before the FATF and hints of progress on the issue:

Iran has taken important steps — that I think we should acknowledge and that I think they should get credit for – in trying to come off of [the FATF] list. They’ve recently enacted a terrorist financing law; they’ve engaged with FATF and are in discussions with FATF to come up with an action plan…I think those discussions have been productive.

It’s important to understand that FATF is a technical body. It’s not a political body. It does not take political considerations into account.

I think FATF is and will continue to treat Iran quite fairly; and as Iran makes progress, I think that progress will be acknowledged by FATF. It will certainly be good for Iran, for FATF, for the United States, and for the entire international community, the more steps Iran takes to police its own system for anti-money laundering and terrorist financing.

Such positive remarks as to the steps that Iran is currently taking to address its strategic deficiencies with its AML/CFT regime earns the question as to whether we can expect FATF’s June 2016 public statement to acknowledge Iran’s good-faith cooperation in the matter and revise its current call for counter-measures. The issue is getting some attention – mainly due to the fact that Iran’s status as a “high-risk, non-cooperative jurisdiction” subject to a FATF call for member states to apply effective countermeasures has hindered the provision of sanctions relief under the recent nuclear accord.

While FATF is indeed a technical body that will adjudicate Iran’s status before the group according to its compliance with FATF recommendations, FATF can revise its call so as to acknowledge the progress that Iran is currently making and to motivate Iran to come into full compliance with global banking norms on this matter. For that reason, I think that it is quite possible that FATF will rescind its designation of Iran as a “non-cooperative” jurisdiction and moderate its call for member states and other jurisdictions to apply effective counter-measures to mitigate against the risks posed by Iran’s financial system.

In such manner, FATF will acknowledge recent progress made by Iran in regards to its AML/CFT regime and encourage Iran to take further steps to win rescission of its designation as a “high-risk jurisdiction”. This will also have the incidental benefit of (1) resolving some of Iran’s frustration over persistent difficulties integrating into the global financial system and benefiting from the formal lifting of nuclear-related sanctions under the JCPOA; and (2) creating a modicum of political space for the Obama administration to take additional steps to ensure that certain surviving sanctions do not stand in the way of Iran receiving the benefit of its bargain under the nuclear accord.

For these reason, I will place a bet on FATF revising its public statement vis-à-vis Iran next month.