Iran International
Every transaction linked to Iran — no matter how small — must now be treated as high-risk under newly tightened regulations introduced by Canada last week, a move experts warn could fall hardest on ordinary Iranians.
The previous $10,000 reporting threshold has been eliminated in favor of a zero-dollar threshold for any financial transaction to or from Iran.
Ottawa tightened the rules after the international anti-money laundering body the Financial Action Task Force (FATF) again warned that Iran remains a high-risk jurisdiction for terrorism financing and sanctions evasion.
Canada says the new rules target funds that originate in Iran and may involve individuals, organizations or networks linked to the Islamic Republic using small transfers to evade sanctions or obscure the true source of money.
But because these transactions often resemble ordinary remittances, the government has argued, the measures now apply to anyone receiving money from Iran, even for legitimate reasons.
“There is a risk that the Islamic Republic of Iran may be facilitating sanctions evasion, which the Minister is of the opinion could have an adverse impact on the integrity of the Canadian financial system or the reputational risk to that system," Canada’s Finance Minister wrote in a statement.
Canada is home to one of the largest Iranian diaspora communities in the world — nearly 300,000 people — and many depend on incoming transfers from Iran, ranging from the sale of land or property and inheritance payments to financial support that parents send to their children studying at Canadian universities.
Remittances from professionals in Canada to loved ones in Iran are also widespread.
FINTRAC, or Financial Transactions and Reports Analysis Centre of Canada, is the independent federal agency reporting to the Ministry of Finance which is overseeing the rule change.
“With the changes, all businesses subject to the Act are required to report every financial transaction to or from Iran regardless of its amount,” a spokesperson for FINTRAC wrote to Iran International.
“Prior to this update," she added, "the Ministerial Directive only required banks, credit unions, foreign banks and money services businesses to report every financial transaction to or from Iran.”
'Uniquely challenging'
But experts warn that while the directive may make it harder for Islamic Republic-linked actors to move money, it may also create unintended consequences.
Investigative journalist Sam Cooper, one of Canada’s leading reporters on transnational crime, said Iran-linked transactions were particularly hard to detect.
“The regime and its proxies already operate through deep, global underground banking networks," said Cooper, author of Willful Blindness, a book on money laundering networks operating through Canada. "They work with transnational crime groups — from Hezbollah to Latin American cartels and their partners in places like Venezuela.”
Cooper added that tougher reporting rules often fall hardest on ordinary Iranians trying to send money through legitimate channels.
“They often hit ordinary Iranians who refuse to use those underground networks and end up locked out of legitimate banking instead. That can unintentionally strengthen Iranian, Chinese and Mexican criminal networks, which step in to provide ‘services’ that formal banks can no longer offer,” he said.
Canada shuttered its embassy and cut diplomatic ties with Iran in 2012 over what it called security concerns for its diplomats and Iran’s alleged support for terrorism and human-rights abuses.
The move is also being closely watched by those involved in shaping Canada’s sanctions policy. Brandon Silver, an international human rights lawyer has provided expert testimony before Parliament, welcomed the strengthened guidance which many in the sanctions community have long pushed for.
“This FINTRAC guidance on Iran is a reflection of the Islamic Republic’s culture of corruption and criminality,” Silver told Iran International.
“These funds are used to finance mass domestic repression and external aggression — whether it is the murder and maiming of Iranian women’s rights leaders, or the transnational repression targeting Canadians," he said, adding that he hoped other countries in the G7 grouping of wealthy democracies would impose their own curbs.
AFP reported that at least 34 ships linked to suspected sanctions evasion were Cook Islands–flagged over the period, including 20 cited on US sanctions lists and a further 14 on a British blacklist.
The flag is administered by Maritime Cook Islands, a private operator that runs the registry for the self-governing Pacific territory.
The analysis said shipowners could obtain Cook Islands papers without visiting the country, using a small beachside office – located next to a pizza shop – as their point of contact. The office serves as the headquarters for what AFP described as one of the world’s fastest-growing shipping registries.
New Zealand, which has a free-association relationship with the Cook Islands and retains responsibilities that include foreign affairs, said the findings show a policy divergence with the microstate and that Wellington has repeatedly raised concerns with its government.
“New Zealand continues to hold serious concerns about how the Cook Islands has been managing its shipping registry, which it has repeatedly expressed to the Cook Islands government over many years... This is a completely unacceptable and untenable foreign policy divergence,” said a spokesman for Foreign Minister Winston Peters.
Maritime Cook Islands said it does not harbor sanctioned vessels and that any ships accused of sanctions-busting are promptly deleted from the registry, adding that it conducts due diligence checks before registration.
Western sanctions aim to limit oil revenue for Tehran and Moscow.
Analysts say a “shadow fleet” uses reflagging, opaque ownership and ship-to-ship transfers to move cargoes outside mainstream maritime services – a practice that places added scrutiny on flag registries as enforcement widens to entities connected to suspect voyages.
In a letter addressed to Judiciary Chief Gholamhossein Mohseni Ejei, 155 members of parliament said the judiciary had become passive in applying regulations on Islamic dress and public behavior.
They urged the courts to “restore governance” by ensuring that all state bodies enforce existing rules while the government’s postponed hijab law remains under review.
“The judiciary cannot remain passive toward failures by executive bodies,” the lawmakers wrote, accusing some judges and officials of “negligence” that had allowed “moral decline” and “social abnormalities” to spread.
The lawmakers urged action on the Chastity and Hijab law—formally called the Law on Protection of the Family Through Promotion of Chastity and Hijab—which was approved by parliament but has yet to be sent to the government for implementation.
Parliament Speaker Mohammad Bagher Ghalibaf has faced mounting criticism from hardline lawmakers who accuse him of withholding the legislation.
Tehran MP Kamran Ghazanfari on Tuesday said Ghalibaf had refused to finalize the law since September last year, calling the delay a violation of his legal duty.
“This means obstructing the implementation of a Quranic and divine command,” he told parliament, accusing the speaker of “ignoring repeated calls” from clerics and legislators and allowing “immodesty and corruption” to spread.
Government signals caution
Also on Tuesday, government spokeswoman Fatemeh Mohajerani said ministries have submitted periodic reports on the status of hijab enforcement to President Masoud Pezeshkian and Supreme Leader Ali Khamenei.
“The hijab report has been delivered on time to the president and the Supreme Leader, and action will be taken to curb organized movements,” she said, adding that each ministry provides updates according to its responsibilities within specific time frames.
Supreme leader’s directive
Tensions rose further last week when a leaked audio file suggested Supreme Leader Ali Khamenei had issued a written order to step up enforcement of Islamic dress codes after reviewing an intelligence ministry report warning of “erosion of discipline.”
Officials later confirmed the directive but denied any dispute within the cabinet. Conservative outlets described it as an “explicit call for decisive action” against violations of the hijab law.
Despite growing pressure, many women and girls continue to appear unveiled in public. The Associated Press reported last week that uncovered women were seen walking freely in Tehran’s markets, metro stations and schools, often without interference from police.
Analysts say authorities are wary of large-scale crackdowns that could reignite unrest. “The scale of disobedience is unprecedented,” said Iran analyst Holly Dagres. “Another coercive campaign could spark protests they cannot contain.”