UK Sanctions
The Iran (European Union Financial Sanctions) Regulations 2010
These Regulations came into effect in the United Kingdom on 11th December 2010. Pursuant to Article 1 it is a criminal offence for any UK national or body incorporated under UK law to commit a breach of provisions relating to
(i) freezing of funds and economic resources, and
(ii) restrictions on the transfer of funds and on the provision of financial services,
in their dealings with Iran and Iranian entities.
These provisions, which are set out in Parts 2 and 3 of the Regulations respectively, closely mirror the following similarly named provisions set out in EU Regulation 961/2010 on Restrictive Measures against Iran: -
Articles 16 to 19 (Freezing of Funds and Economic Resources)
Articles 21 to 26 (Restrictions on Transfers of Funds and on Financial Services).
An offence is committed if a person intentionally participates in activities knowing that the object or effect of them is to circumvent or enable the contravention of any of the prohibitions that relate to the freezing of funds and economic resources, or on the transfer of funds or provision of economic resources.
If an offence is committed by a body corporate with the consent or connivance of any director, manager, secretary or other similar officer of the body corporate, or any person purporting to act in any such capacity, or if such offence is attributable to the neglect of any such person, then that person, as well as the company, shall also be guilty of the offence.
A person guilty of an offence under the Regulations is liable to up to 2 years imprisonment on conviction on indictment, or to a fine or both, or up to 3 months on summary conviction, or to a fine or both.
THE FINANCIAL RESTRICTIONS (IRAN) ORDER 2011
With effect from 21 November 2011 UK credit and financial institutions are required to comply with major new restrictions relating to the Iranian banking sector.
With limited exceptions, the Order prohibits UK financial and credit institutions from making or receiving payments to/from Iranian banks and their branch offices and subsidiaries, wherever located, and requires them to end business relationships with Iranian banks.
Reed Smith have kindly given permission for the publication of their Iran Sanctions Update, which summarises the key points. A copy can be downloaded from the link below.
STATUTORY INSTRUMENT 2012 NO. 925 - THE IRAN (EUROPEAN UNION FINANCIAL SANCTIONS) REGULATIONS (2012) (CRIMINAL)
These Regulations came into effect in the United Kingdom on 26 March 2012. Pursuant to Section 1 it is a criminal offence for any UK national or body incorporated under UK law to commit a breach of provisions relating to:
(i) freezing of funds and economic resources of a designated entity and
(ii) restrictions on the transfer of funds and on the provision of financial services, in their dealings with Iran and Iranian entities.
These provisions, which are set out in Parts 2 and 3 of the Regulations respectively, closely mirror the following similarly named provisions set out in EU Regulation 267/2012 on Restrictive Measures against Iran: -
Articles 23 to 29 (Freezing of Funds and Economic Resources)
Articles 30 to 35 (Restrictions on Transfers of Funds and on Financial Services).
Under section 19 an offence is committed if a person intentionally participates in activities knowing that the object or effect of them is to circumvent or enable the contravention of any of the prohibitions that relate to the freezing of funds and economic resources, or on the transfer of funds or provision of financial services.
Under Section 20 if an offence is committed by a body corporate with the consent or connivance of any director, manager, secretary or other similar officer of the body corporate, or any person purporting to act in any such capacity, or if such offence is attributable to the neglect of any such person, then that person, as well as the company, shall also be guilty of the offence.
A person guilty of an offence under the Regulations is liable to up to 2 years imprisonment on conviction on indictment, or to a fine or both, or up to 3 months on summary conviction, or to a fine or both.
STATUTORY INSTRUMENT 2012 NO. 1243 – The EXPORT CONTROL (IRAN SANCTIONS) ORDER 2012
The Export Control (Iran Sanctions) Order 2012, which will come into effect on 1 June 2012, provides for offences and penalties in relation to restrictive measures against Iran imposed by the EU pursuant to EU Council Regulations 267/2012 (the Iran Sanctions Regulation) and 359/2011 (the Iran Human Rights Regulation) .
The Order provides that a person subject to the Order who is knowingly concerned in one of a range of activities prohibited under EU Regulations 267/2012 and/or 359/2012 with intent to evade such prohibition, or who knowingly and intentionally participates in activities the object or effect of which is (whether directly or indirectly) to circumvent any of the listed prohibitions in Regulations 267/2012 and 359/2012 commits an offence and may be arrested.
For the purposes of obtaining EU authorisations (which can be available under the Regulations), a person will commit an offence if that person (a) makes any statement or furnishes any document or information which to that person’s knowledge is false in a material particular; or (b) recklessly makes any statement or furnishes any document or information which is false in a material particular.
A person guilty of an offence under the Order is liable to up to 10 years imprisonment on conviction on indictment, or to a fine or both, or up to 6 months on summary conviction, or to a fine or both.
Copies of The Iran (European Union Financial Sanctions) Regulations (2012) (Criminal), The Export Control (Iran Sanctions) Order 2012, and a guidance note prepared by the International Group on The Export Control (Iran Sanctions) Order 2012, can be downloaded from the links set out below.
THE FINANCIAL RESTRICTIONS (IRAN) ORDER 2012 - 20 NOVEMBER 2012
With effect from 21 November 2012, HM Treasury has given a new direction to all UK credit and financial institutions, requiring them to cease all business with banks incorporated in Iran and their branches and subsidiaries, wherever located, including the Central Bank of Iran.
The direction is in the same terms as that given by the Treasury on 21 November 2011, which ceased to have effect on 19 November 2012. The new Order is valid for one year and will (unless revoked earlier) expire on 19 November 2013. The effect of the new Order is that UK credit and financial institutions continue to be prohibited from entering into transactions or business relationships with banks incorporated in Iran and their branches and subsidiaries unless they are licensed to do so by the Treasury.
HM Treasury has produced a Guidance Note (substantively the same as that issued following the Financial Restrictions (Iran) Order 2011), to explain what the restrictions are and how they interact with existing financial sanctions against Iran.
The Treasury has also issued six general licences. A full explanation of the general licences can be found in the HMT Guidance Note.
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 (Examples of personal remittances include payments provided between family members for living expenses, or transfers made to students studying in the UK to meet their course fees or living expenses)
General Licence 3: transactions in relation to the provision of insurance which is permitted under Article 35(2) and (3) of EU Regulation 267/2012 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: authorises acts which prior to the date of this licence were exempted by way of licence from the Iran (Financial Restrictions) Order 2011
Copies of the Order, and the HMT Guidance Note, can be downloaded from the links set out below.
THE FINANCIAL RESTRICTIONS (IRAN) (REVOCATION) ORDER - 29 JANUARY 2013
On 31 January 2013 the Financial Restrictions (Iran) Order 2012 was revoked.
The Financial Restrictions (Iran) Order 2012 ("the 2012 Order") prohibited transactions and business relationships between UK credit and financial institutions and Iranian banks.
EU Regulation 1263/2012 amended EU Regulation 267/2012 ("the EU Regulation") so that it is prohibited for EU (and therefore UK) credit and financial institutions to transfer funds to or from Iranian banks and financial institutions without authorisation.
Article 30 (as amended) of the EU Regulation contains effectively the same prohibition as was contained in the Financial Restrictions (Iran) Order 2012. Consequently the Order is being revoked in order to avoid any confusion resulting from two restrictions operating in parallel.
Copies of the Revocation Order, and a related HMT notice, can be downloaded from the links set out below.
STATUTORY INSTRUMENT 2013 NO. 163 - THE IRAN (EUROPEAN UNION FINANCIAL SANCTIONS) (AMENDMENT) REGULATIONS (2013) (CRIMINAL) - 29 JANUARY 2013
The Iran (European Union Financial Sanctions) Regulations 2012 came into effect in the United Kingdom on 26 March 2012, pursuant to which it was made a criminal offence for any UK national or body incorporated under UK law to commit a breach of provisions (mirroring those set out in EU Regulation 267/2012) relating to:
(i) freezing of funds and economic resources of a designated entity; and
(ii) restrictions on the transfer of funds and on the provision of financial services, in their dealings with Iran and Iranian entities.
The 2012 Regulations have been amended with effect from 31 January 2013 by The Iran (European Union Financial Sanctions) (Amendment) Regulations 2013 to extend the criminal sanctions to the prohibitions on the transfer of funds to/from Iranian credit or financial institutions, subject to the exemptions, and notification/authorisation requirements, as set out in EU Regulation 1263/2012 of 21 December 2012.
Under section 19 of the UK Regulations, an offence is committed if a person intentionally participates in activities knowing that the object or effect of them is to circumvent or enable the contravention of any of the prohibitions that relate to the freezing of funds and economic resources, or on the transfer of funds or provision of financial services.
Under Section 20 if an offence is committed by a body corporate with the consent or connivance of any director, manager, secretary or other similar officer of the body corporate, or any person purporting to act in any such capacity, or if such offence is attributable to the neglect of any such person, then that person, as well as the company, shall also be guilty of the offence.
A person guilty of an offence under the Regulations is liable to up to 2 years imprisonment on conviction on indictment, or to a fine or both, or up to 3 months on summary conviction, or to a fine or both.
EU REGULATION 42/2014 - AMENDED PAYMENT NOTIFICATION AND AUTHORISATION PROVISIONS
With the publication on 20 January 2014 of EU Regulation 42/2014, the notification and authorisation thresholds for transfers of funds to or from Iran have been amended as part of the wider package of measures relaxing EU sanctions in respect of Iran pursuant to the Joint Plan of Action agreed between the P5+1 countries (United Kingdom, United States, China, France, Russia and Germany) and The Islamic Republic of Iran.
In brief, the financial thresholds applicable to persons subject to the jurisdiction of EU States are increased ten-fold, meaning that some payments which previously needed to be authorised will only need to be notified.
The revised thresholds are as follows:
- personal remittances from EUR 40,000 to EUR 400,000;
- for transactions regarding foodstuffs, healthcare, medical equipment or for agricultural or humanitarian purposes from EUR 100,000 to EUR 1 million; and
- for all other transfers of funds to and from Iran from EUR 10,000 to EUR 100,000.
It is important to note that HMT still encourages the notification of certain transfers equivalent to between EUR 10,000 and EUR 100,000. In addition, transfers involving designated entities remain prohibited in the absence of an express licence from HMT in UK or the relevant competent authority in other EU States.
Copies of a Financial Sanctions Notice published by HMT on 21 January, and an accompanying guidance note can be downloaded from the links set out below.
