UK financial restrictions against Iranian banks
The following alert was issued by the Asset Freezing Unit of HM Treasury, UK.
If you have any queries relating to the restrictions, please firstname.lastname@example.org
If you wish to subscribe to this alert, please send an email email@example.com
from the email address you wish to subscribe with the words SUBSCRIBE SANCTIONS only in the subject field.
Sanctions and Illicit Finance
Asset Freezing Unit
1 Horse Guards Road
London SW1A 2HQ
FINANCIAL RESTRICTIONS AGAINST IRANIAN BANKS
HM Treasury has today imposed new financial restrictions against Iran. From 15:00 Monday 21 November 2011, all UK credit and financial institutions are required to cease business relationships and transactions with all Iranian banks, including their branches and subsidiaries, and the Central Bank of Iran. This means that UK credit and financial institutions are prohibited from entering into transactions or business relationships with these entities and continuing existing transactions and business relationships with them, unless licensed to do so by HM Treasury.
The restrictions are contained in the Financial Restrictions (Iran) Order 2011http://www.hm-treasury.gov.uk/d/fin_restrictions_iran_order2011.pdf
This action has been taken because of the Government's serious and ongoing concern in relation to Iran's nuclear activities. Iranian banks play a crucial role in providing financial services to individuals and entities within Iran's nuclear and ballistic missile programmes, as companies carrying out proliferation activities require banking services. London is an important global financial centre and the UK's financial restrictions will make it more difficult for Iranian banks to utilise the international financial system in support of Iran's nuclear and ballistic missile programmes. This measure will protect the UK financial sector from being unknowingly used by Iranian banks for proliferation related transactions. This follows the International Atomic Energy Agency's latest report on Iran, which highlights fresh concerns about possible military dimensions to Iran's nuclear programme.
The case for action is underlined by the recent calls from the Financial Action Task Force for countries to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism risks emanating from Iran. The FATF (the global standard setting body for anti-money laundering and combating the financing of terrorism) renewed these calls with urgency on 28 October 2011 and noted its particular and exceptional concern about Iran's failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system.
The Financial Secretary to the Treasury, Mark Hoban, laid a Written Ministerial Statement in Parliament on 21 November 2011 setting out the reasons for the restrictions, which can be found herehttp://www.hm-treasury.gov.uk/d/written_ministerial_statement_comsec211111.pdf
Treasury have produced a notice to explain what the restrictions are and how they interact with existing financial sanctions against Iran. The notice can be found here:http://www.hm-treasury.gov.uk/d/fin_restrictions_iran_notice2011.pdf
person affected by the restrictions can apply for a licence from HM Treasury (contact details below) exempting a transaction or business relationship from the requirements. The Treasury has also issued six general licences. A full explanation of the general licences can be found in the notice on the restrictions.
- General Licence 1: transactions for or related to humanitarian activities or purposes, including the export of medical equipment or foodstuffs and the provision of healthcare, under €40,000
- General Licence 2: transactions for or related to personal remittances (that is, payments between persons acting in a non-commercial, private capacity, the payments not being made in the course of a business), under €40,000
- General Licence 3: transactions in relation to the provision of insurance which is permitted under Article 26(2) and (3) of EU Regulation 961/2010 against Iran
- General Licence 4: holding of asset-frozen Iranian banks’ accounts
- General Licence 5: holding accounts of non-frozen Iranian banks
- General Licence 6: completion of payments to or from Iranian banks in progress at the time of the Direction coming into force
It should be noted that the restrictions have been introduced because of the risks posed to the UK's national interests by activities in Iran and the support given to those activities by the Iranian banking sector. Given the importance of an effective response to those risks, it is unlikely that the Treasury will issue licences for business with Iranian banks on an ongoing basis under new contracts.
If you have business links with Iran, you may be affected by the restrictions. The Department for Business, Innovation and Skills have produced a notice to exporters and companies with trading interests in Iran. This will be available on the BIS website in due course. The BIS website address ishttp://www.bis.gov.uk
You may also be interested in:
FATCA became law in March 2010 and came into effect on 1st July 2014, the FATCA form has since been updated as of March 2021.
QCR Winter 2018: Issuing and sending letter of credit through SWIFT on form MT700 – Party issuing the letter of credit the Issuing Bank? – Extrinsic evidence could be relevant
The claimant Yuchai Dongte, a Chinese manufacturer, sought payment pursuant to a letter of credit (LC) which it said had been issued by the defendant on 10 March 2014. The defendant provided financial services and was a member of the SWIFT network - a global platform for secure financial messaging using common standards and forms, but it was not a bank.