Iran yesterday ruled out linkage between a new EU mechanism to trade with Tehran bypassing US sanctions and an anti-money laundering bill.

"Linking implementation of this mechanism... with the requirements of institutions such as the FATF is unacceptable," the foreign ministry said, referring to the international Financial Action Task Force.

Iran is on an FATF blacklist drawn up to counter money laundering and the financing of terrorist groups, but the Paris-based organisation has suspended counter-measures since 2017 while Tehran works on reforms.

EU leaders on Monday welcomed the bloc's new mechanism to trade with Iran but warned Tehran over its ballistic missile programme and regional policies while calling for it to implement reforms to comply with FATF demands.