UK Imposes Sanctions on All Iranian Banks
On November 21, the UK government, in response to concerns about Iran’s nuclear activities, imposed sanctions against all Iranian banks and on the Iranian Central Bank. The UK government has indicated the action is being taken in coordination with other partner countries that will make their own announcements separately.
Under the Financial Restrictions (Iran) Order 2011, from 15:00 GMT (10:00 EST) Monday, November 21, 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 both from entering into transactions or business relationships with these entities and from continuing existing transactions and business relationships with them, unless licensed to do so by HM Treasury.
The UK sanctions are not an implementation of EU measures. They are issued under powers conferred by the Counter-Terrorism Act 2008. This is the first time those powers have been used to cut off a country’s entire banking sector from the UK’s financial sector. The UK Treasury says that the Order follows the International Atomic Energy Agency’s latest report on Iran and the recent calls from the Financial Action Task Force for countries to apply effective countermeasures to protect their financial sectors from money laundering.
Similar measures are before the U.S. House of Representatives, where they have attracted some opposition. Sen. Mark Kirk, R-Ill., has offered an amendment to section 1867 of the Defense Authorization Act that would compel the president to sanction the Central Bank of Iran upon enactment.
The UK Chancellor, George Osborne, said, “We believe that the Iranian regime’s actions pose a significant threat to the UK’s national security and the international community. Today’s announcement is a further step to preventing the Iranian regime from acquiring nuclear weapons.”
If you have any questions regarding this alert, please contact—
|Wynn H. Segall
|Tamer A. Soliman
|Sanford E. Warren, Jr.