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.