Iran — Country Risk Report

Iran (Middle East • Western Asia). Risk report as of the 19 Jun 2026 FATF plenary.

Very high country risk, with elevated corruption risk. Iran's country risk score is 9.0/10, placing it in the very high-risk band. Some information is unavailable, so the available parts are rebalanced and the country will not be labelled Low risk while information is missing. The principal driver is weak corruption, alongside voice and accountability risk. Iran is subject to a FATF call for action requiring countermeasures. Iran is subject to comprehensive country-wide sanctions. Firms should apply additional scrutiny where exposure involves state-linked entities, restricted sectors, sensitive technology, dual-use goods or politically exposed counterparties.

Recommended treatment

Enhanced due diligence, with restriction or prohibition of higher-risk activity.

At a glance

• FATF status: Black list (one indicator only; it does not set the overall country risk rating by itself)
• Comprehensive country sanctions: in place. Targeted sanctions exposure: programmes in place, screen applicable lists
• Government effectiveness and rule of law: 6.7/10
• Corruption (CPI 2025): 23/100, rank #153 of 182
• Enforcement data: not yet assessed (no RegActions coverage)

Country Risk Score: 9.0/10 (Very high)

Higher score means higher country risk (global average 4.6). Some information unavailable. Limited supporting information. Enforcement activity and CPI are shown for context but do not change the score.

One of the three parts is unavailable. The available parts are rebalanced, and the result will not be labelled Low risk while information is missing.

How this score was calculated

• Financial crime controls: information unavailable — 0% of this score
• Government effectiveness and rule of law: 6.7/10 — 60% of this score
• International sanctions: 9.3/10 — 40% of this score
• Financial crime controls information is unavailable.
• FATF call-for-action status means the score cannot be lower than 9.0. This minimum set the final score.
• comprehensive international sanctions sets a minimum of 8.0, but the calculated score was already higher.

Principal risk drivers

• FATF call for action requiring countermeasures
• Comprehensive sanctions exposure
• Corruption (WGI) — 7.5/10
• Voice & accountability — 7.0/10
• Rule of law & institutions — 6.5/10

Mitigating factors

• Risk is concentrated in specific counterparties, sectors and transactions rather than applying uniformly.

Business impact

• Customer onboarding (Enhanced): Additional ownership and control verification may be required.
• Payments and transactions (Enhanced): Review transaction purpose, counterparties and geographic routing.
• Trade and export activity (Enhanced): Screen goods, end users and potential dual-use exposure.
• Corporate clients (Enhanced): Assess state ownership, government links and political exposure.
• Ongoing monitoring (Enhanced): Apply alerts for ownership changes, sanctions and geopolitical developments.

Recommended controls

• Verify ultimate beneficial ownership using more than one reliable source.
• Identify state ownership, government influence and politically exposed persons.
• Screen entities, directors and beneficial owners against applicable sanctions lists.
• Apply enhanced review to technology, defence, telecommunications, financial services and dual-use activity.
• Document transaction purpose and source of funds where cross-border structures are complex.
• Escalate unresolved ownership opacity or adverse information to Compliance.

Enhanced due diligence triggers

• State ownership / control
• PEP involvement
• Sensitive / restricted sectors
• Opaque ownership
• Adverse media
• Dual-use goods & technology
• High-risk intermediary routing

FATF status: Black list

High-Risk Jurisdiction Subject to a Call for Action. Subject to call for action and countermeasures. Last reviewed 19 Jun 2026; next FATF plenary Oct 2026.

Sanctions: Comprehensive

• EU — sectoral: Restrictive measures in relation to serious human rights violations in Iran (source)
• EU — sectoral: Restrictive measures in relation to the non-proliferation of weapons of mass destruction (source)
• EU — sectoral: Restrictive measures in view of Iran’s military support to Russia’s war of aggression against Ukraine and to armed groups and entities in the Middle East and the Red Sea region (source)
• OFAC — comprehensive: Iran Sanctions (source)
• UK — sectoral: Iran nuclear sanctions (source)
• UK — sectoral: Iran sanctions (source)
• UN — sectoral: 1737 Iran sanctions (source)

Source details

International sanctions by issuing body

• UN: Yes (Sectoral)
• EU: Yes (Sectoral)
• UK: Yes (Sectoral)
• US: Yes (Comprehensive)

No means the complete UN, UK, EU and US review found no direct country-level programme. People or organisations may still appear on sanctions lists.

Government effectiveness and rule of law (World Bank 2024, percentile)

• Government Effectiveness: 38/100
• Regulatory Quality: 31/100
• Rule of Law: 36/100

Regulators and legal framework

FATF network

Outside the FATF regional network.

National regulators

Regulator profiles not yet available on RegActions.

FIU: Not an Egmont Group member

Framework signals

• FATF listing: Black list
• International sanctions: comprehensive country programme
• Corruption (CPI 2025): 23/100, rank #153 of 182
• Rule of law (WGI): 6.5/10 risk

Sector exposure

• Banking & payments (High): FATF black-list call for action, correspondent lines likely severed
• Trade & export controls (High): Comprehensive sanctions embargo restricts most cross-border trade
• Crypto & virtual assets (High): FATF black-list status signals severe VASP supervision gaps
• Real estate & luxury assets (High): Severe corruption exposure (CPI 23/100) drives laundering risk
• State-linked & procurement (High): Comprehensive sanctions capture state entities and procurement

Derived from sanctions tier, FATF listing, World Bank WGI governance and CPI; no per-sector dataset is asserted.

Iran: analysis

Iran's profile combines an exceptionally weak governance picture with FATF blacklisting and a comprehensive sanctions regime. Governance is driven by corruption (severe), voice and accountability (severe), and rule of law and institutions (elevated), all of which are severely elevated. Political stability (elevated) is the relatively least-adverse domain but remains high. The CPI reading and a position in the lowest third of the World Bank governance indicators confirm a deeply deficient institutional environment. Multiple sanctions programmes are in force, including the comprehensive US OFAC Iran embargo, EU restrictive measures, UK Iran (Sanctions) Regulations, and UN proliferation measures. Business with Iran is effectively prohibited for most regulated firms.

Outlook

Iran's risk outlook is negative. FATF countermeasures remain in force and there is no indication of imminent removal from the black list. Comprehensive sanctions significantly constrain any legitimate financial exposure. Firms must apply the highest level of scrutiny to any transaction or relationship with a nexus to Iran, including indirect exposure through third-party jurisdictions.

Key watchpoints

• Any FATF black-list review outcomes and the status of countermeasures at future plenaries.
• Changes to the OFAC, EU, UK, or UN sanctions programmes, including any new designations or sectoral expansions.
• Indirect Iran exposure through correspondent banking chains, trade finance, or intermediary jurisdictions.
• Proliferation financing risk, given the UN proliferation measures in force.

Assessment currency

• FATF status: Call for action: countermeasures (as of 19 Jun 2026)
• Sanctions exposure: Comprehensive programme in place (as of Jul 2026)
• Governance (WGI): Latest dataset incorporated (as of 2024)
• Corruption (CPI): 23/100 (as of 2025)
• RegActions assessment: Reviewed (as of 19 Jun 2026)

Public evidence layer

FATF action: countermeasures. FATF calls for countermeasures proportionate to the jurisdiction's risks.

Contextual signals (not scored)

• FATF network membership: No FATF or regional-body membership identified (absent, as of 2026-07)
• EU non-cooperative tax jurisdictions: Not listed in Annex I (absent, as of 2026-02-17)
• Egmont Group FIU: No Egmont member FIU identified (absent, as of 2026-07-17)
• Beneficial-ownership register: No live register identified in the source (unavailable, as of 2026-07-17)
• Transparency International CPI: 23/100, rank 153 (present, as of 2025)

Evidence freshness

• FATF monitored-jurisdiction status: current; data 2026-06-19
• FATF mutual evaluation and follow-up ratings: current; data 2026-07-31
• World Bank governance indicators: current; data 2024
• UN, UK, EU and US sanctions regimes: current; data 2026-08-13

Contextual signals are public evidence only and do not change the immutable v2 score.

Download evidence PDF · CSV · JSON

Regional peer scores

• Syria: 7.0/10 (Very high)
• Yemen: 7.0/10 (Very high)
• Lebanon: 6.1/10 (High)
• Iraq: 6.0/10 (High)
• Kuwait: 6.0/10 (High)
• Jordan: 4.4/10 (Moderate)

Source: FATF black & grey lists · World Bank WGI (CC BY 4.0 — World Bank WGI) · TI CPI (CC BY-ND 4.0 — Transparency International, display only)