The Palermo Convention, formally known as the United Nations Convention against Transnational Organized Crime, is the principal international instrument addressing transnational crime. It entered into force on September 23, 2003, and is accompanied by three protocols related to human trafficking, the smuggling of migrants, and the illicit manufacturing and trafficking of firearms. Nearly all countries in the world are parties to the Convention, reflecting the international community’s consensus to combat transnational organized crime.
Although Iran was one of the early signatories of the Convention, its final ratification took over two decades, occurring on May 14, 2025, through the approval of Iran’s Expediency Council. The full implementation of the Convention is subject to Iran’s domestic legal framework.
Iran’s accession to the Palermo Convention is significant for its standing in the financial market. It not only enhances the country’s financial transparency but also represents a major step in fulfilling the Financial Action Task Force (FATF) action plan for Iran. By complying with FATF requirements of which adherence to the Palermo Convention is a key element, Iran can alleviate economic sanctions imposed by over 200 countries, international organizations, and the United Nations. This would, in turn, open the door to foreign capital and trade opportunities for Iran. Specifically, compliance with the FATF action plan enables Iran to reintegrate into international banking networks, such as the SWIFT banking system. This significantly reduces transaction costs and attracts a higher rate of foreign direct investment (FDI) in Iran.
China and Russia, two strategic partners of Iran, have expressed their support for Iran’s accession to the Palermo Convention, helping facilitate trade relations between the nations. Iranian officials, such as the Vice President of the Iran Chamber of Commerce, have also highlighted that this accession will enhance Iran’s exports. In conclusion, the accession to the Palermo Convention represents a notable shift in Iran’s compliance with international legal norms and opens new economic opportunities for the country by clarifying its financial interactions globally. The full realization of these economic benefits however depends on consistent implementation of this convention and continued compliance with FATF.
