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Financial Sanctions - Iran - Business Relationships with Iranian Banks etc 1 February 2013

Business Relationships with Iranian Banks Etc

On 31 January 2013, Council Regulation (EU) No. 1263/2012 came into operation in the Isle of Man, when the European Union (Iran Sanctions) (Proliferation) (Amendment) Order 2013 was made.

The newly applied Regulation amended Article 30 of Council Regulation (EU) No. 267/2012 so that it now includes a prohibition affecting credit and financial institutions which is effectively the same as that contained in the Financial Restrictions (Iran) Order 2012. This prohibition means that businesses in the regulated sector involved in financial services activities cannot enter into, or continue, certain transactions or business relationships with Iranian banks (or branches or subsidiaries) or the Central Bank of Iran.

Whilst the Financial Restrictions (Iran) Order 2012 is to be revoked, as it is no longer required, this does not significantly change the effect of the prohibition - except that the restriction now also applies to all Iranian financial institutions (e.g. money transmitters) as well as banks.

The restrictions on the transfer of funds to and from Iranian financial institutions remain in place. However, there are some changes to the thresholds above which licences will be required -

  • No licence is required for a transfer between a credit or financial institution here and one in Iran if the transfer is under €10,000.
  • No prior authorisation is required for a transfer if it is a personal remittance and it is under €40,000 (but a prior notification must be sent to the Treasury if the transfer is over €10,000).
  • Humanitarian payments are exempt from the prohibition on the transfer of funds if they are of €100,000 or less (but a prior notification must be sent to the Treasury if the transfer is over €10,000).

It remains prohibited to make funds or economic resources directly or indirectly available to any person, entity or body designated under the EU sanctions Regulations, including designated Iranian banks.

Prior notifications, applications for prior authorisations, and any queries about the prohibitions and restrictions imposed and involving Iran should be directed to the Sanctions Officer at Customs and Excise.

The attached Table provides guidance on the notification and authorisation requirements for transfers of funds between credit and financial institutions in the Island and those in Iran. Sanctions Notice 24 (Iran) will be updated in due course with details of the changes made following the application of Council Regulation (EU) No. 1263/2012, and the application of Council Regulation (EU) No. 1245/2012 (which also came into operation in the Island on 31 January). The Supplement to Sanctions Notice 24, which contained frequently asked questions regarding funds transfers to and from Iran, has been withdrawn to be revised.

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