Companies and individuals should be aware of recent changes in the UK's position on sanctions against Iran
UN Security Council resolutions 1737 and 1747 set out the measures that UN member states must take as a consequence of concerns over the development of a nuclear programme in Iran. Certain financial aspects of the resolutions have been implemented in the UK by statutory instrument 2007/281 (the "Order"). Other aspects of the UN sanctions will be implemented in the UK via a directly applicable European Council regulation, the final form of which has not yet been agreed
In relation to certain designated Iranian entities and individuals it is now a UK criminal offence to:
- Deal with funds or economic resources owned, held or controlled, directly or indirectly, by that entity or individual;
- Make funds or economic resources available, directly or indirectly, to or for the benefit of that entity or individual; or
- Circumvent, enable or facilitate the commission of one of the above offences.
There are defences available to the first two offences above based on lack of knowledge and lack of reasonable cause to suspect the offence, and the Treasury may grant licences in relation to those offences.
Authorised FSA institutions and certain EEA firms are guilty of an offence:
If they fail to inform the Treasury as soon as practicable if the institution knows or suspects that a customer or a person with whom the institution has had dealings in the course of its business since the Order came into force: (a) is a designated person; (b) is acting on behalf of or at the direction of a designated person; (c) is owned or controlled by a designated person; or (d) has committed one of the offences set out above.
If offences under the Order are committed by a body corporate with the consent or connivance of an officer of the body corporate or if the offences are attributable to neglect on the part of the officer, the officer in addition to the body corporate is guilty of the offence and is liable to be proceeded against and punished accordingly. The Order extends to the United Kingdom and the offences may be committed by persons including any person in the United Kingdom, British Citizens wherever their location, and bodies incorporated or constituted under the law of any part of the United Kingdom.
The UN Resolutions also include provisions concerning military goods and related finance and provisions prohibiting the direct or indirect supply, sale or transfer of materials that could contribute to Iran's enrichment-related reprocessing or heavy water-related activities, or to the development of nuclear weapon delivery systems, as well as provisions preventing certain assistance and training. Draft European Council legislation on these issues (as well as further financial sanctions) is currently very wide ranging but the final version is expected to change from the current draft text. For now relevant potential UK exporters should bear in mind the Proposal for a Council Regulation whilst complying with the existing UK and EU export regimes.
The above relates to the UK position. Relevant companies and individuals should be aware that other States have imposed sanctions on Iran, including the USA which has unilateral sanctions on Iran that are wider in scope than the UN sanctions.
Relevant companies and individuals should be aware of the recent change in the UK position and should bear in mind that, given Iran's continuing non-compliance with the UN sanctions, the situation might change again soon.