The Financial Action Task Force said Iran would stay on its blacklist, and called on member states to sanction the country. By Maria Abi-Habib and Salman Masood Feb. 21, 2020 The world’s top antiterrorism monitoring group voted on Friday to keep Iran on its blacklist for failing to tackle terrorism financing at home, extending international sanctions at a time when the country had hoped to offset its struggling economy by doing business with Europe. The Financial Action Task Force, a Paris-based monitoring group, had given Iran a February deadline to approve antiterrorism legislation or remain on the blacklist. Although Iran’s parliament passed the legislation, a top clerical body voted it down. The blacklisting will complicate Iranian plans to sidestep American sanctions by instead doing business with European countries. France, Britain and Germany had said they would continue to do business with Iran as long as the country got itself off the F.A.T.F.’s blacklist. As a way to skirt, but not violate, American sanctions, the European countries had tied a new channel for nondollar trade with Iran to its compliance with F.A.T.F. rules. The United States scrapped its nuclear deal with Iran in 2018 and reimposed crippling sanctions that have cratered oil exports and caused inflation to rocket. Until Iran adopts stronger measures “the F.A.T.F. will remain concerned with the terrorist financing risk emanating from Iran and the threat this poses to the international financial system,” according to a Friday statement from the watchdog. Among the recommendations made, the F.A.T.F. noted Iran should “adequately” criminalize terrorism financing and ratify United Nations antiterrorism financing conventions. As the F.A.T.F. deliberated on Friday, Iranians went to the polls to vote for a new parliament. Observers expect a more hard-line parliament to be elected, after Iranian leaders disqualified more than 7,000 candidates, most of them moderates. The F.A.T.F. monitors all forms of illicit finance, from money laundering to terrorism financing, and has nearly 40 countries and member organizations. If the F.A.T.F. places a country on its black or gray lists, it can complicated that nation’s ability to tap global credit markets or welcome international investments. In a separate ruling on Friday, the F.A.T.F. announced that it would keep Pakistan on its gray list, a step above a blacklisting, but criticized the country for not doing enough to fight terrorism financing. The F.A.T.F. noted that Pakistan had complied with most of the requirement list the group established in 2018, when Pakistan was put onto the gray list at the urging of the United States. But officials added that the country was still relatively soft on curbing money laundering that benefited terrorism groups. Being blacklisted would have had grave consequences for the Pakistani economy, which is already struggling with debt and budget shortfalls, despite a program of economic overhauls being administered by Prime MinisterImran Khan’s government. Pakistani officials have argued in recent months that it had successfully complied with the action plan by the monitoring group. In particular, they pointed out the recent conviction of Hafiz Muhammad Saeed, the founder of the Lashkar-e-Taiba group accused of carrying out the 2008 Mumbai attacks, on charges of terrorism financing and links to militant groups. Despite a $10 million U.S. bounty on him, Mr. Saeed had escaped conviction for years, despite being arrested by the Pakistani authorities several times. Pakistan’s case was also likely helped by its cooperation in helping to bring the Taliban to the table for peace talks. American, Afghan and Taliban officials have all signaled in recent days that a deal opening the way for a U.S. troop withdrawal was near. Prime Minister Khan said on Monday that the government was serious about fighting terrorism. And he stressed that Pakistan’s military, which has long been accused of nurturing groups like Lashkar-e-Taiba and the Afghan Taliban, among others, was fully engaged in the effort as well. During the F.A.T.F.’s annual meeting, which began on Tuesday, Pakistan received crucial support from China, Malaysia and Turkey to avoid being blacklisted. China’s support, in particular, was vital. After years of shielding Pakistan at the F.A.T.F., China and another close ally, Saudi Arabia, uncharacteristically stood aside as the monitoring group deliberated in 2018, leading to Pakistan’s placement on the gray list. Pakistan was previously on the F.A.T.F. gray list from 2012 to 2015. Though there are no mandatory international sanctions at that stage, it does hinder a country’s ability to access international markets and financing. Maria Abi-Habib reported from New Delhi, and Salman Masood from Pakistan.