Iran Financial Restrictions Direction

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A decision made on 5 December 2011:

Decision Reference: MD-TR-2011-0150
Decision Summary Title:	Iran Financial Restrictions - Direction		Date of Decision Summary:	5 December 2011
Decision Summary Author:	International Relations		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Iran Financial Restrictions - Direction		Date of Written Report:	5 December 2011
Written Report Author:	International Relations		Written Report : Public or Exempt?	Public
Subject: Iran Financial Restrictions - Direction
Decision(s): The Minister, in pursuance of Article 23C of the Money Laundering (Jersey) Order 2008 decided to make the Iran Financial Restrictions Direction.
Reason(s) for Decision: This action arises from the recent calls from the Financial Action Task Force (FATF) for countries to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism risks emanating from Iran. The FATF (the global standard setting body for anti-money laundering and combating the financing of terrorism) renewed these calls with urgency on 28th October 2011 and noted its particular and exceptional concern about Iran’s failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system. In light of these risks to Jersey’s interests, it is considered a proportionate response to require the financial services sector to cease all business relationships and transactions with Iranian banks and their branches and subsidiaries, including the Central Bank of Iran. Experience under existing UN and EU financial sanctions against Iran demonstrates that targeting individual Iranian banks is not sufficient. Once one bank is targeted, a new one can step into its place. The measures will protect the financial services sector in Jersey from the risk of unwittingly being used to facilitate money laundering activities and financing of terrorism, and signals to Iran and the international community that we consider this risk to be significant. These actions are being taken in coordination with other countries, including a direct request from HM Treasury which strongly encourages Jersey to take action. In accordance with Article 23C(1) of the Money Laundering (Jersey) Order 2008, the Jersey Financial Services Commission has been consulted and is content with the direction.
Resource Implications: There are no resource implications arising from this decision.
Action required: The Minister is requested to approve and sign the Iran Financial Restrictions Direction as attached. The Treasury and Resources Department should – (a) forward the Direction to the Jersey Financial Services Commission and request that they publish the Direction for the information of the finance industry; (b) forward a copy of this decision to the States Greffe and request that notice of the Direction is published.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Iran Financial Restrictions Direction

IRAN FINANCIAL RESTRICTIONS

Proceeds of Crime (Jersey) Law 1999

Money Laundering (Jersey) Order 2008

DIRECTION

The Minister for Treasury and Resources, after consultation with the Jersey Financial Services Commission, has made the following Direction in pursuance of Article 23C of the Money Laundering (Jersey) Order 2008 – Directions where the Financial Action Task Force applies counter-measures.

The Financial Action Task Force (FATF) has called on its members and other jurisdictions to apply counter-measures to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (ML/TF) risks emanating from Iran.

The FATF has also reaffirmed its call on members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with Iran, including Iranian companies and financial institutions.

Relevant persons

The Direction is given to all relevant persons, being –

(a) a person carrying out financial services business in or from within Jersey; or

(b) either –

(i) a Jersey body corporate; or

(ii) a Jersey limited liability partnership,

carrying on a financial services business in any part of the world.

Designated persons

2.1 The Direction in paragraph 3 is given in relation to transactions or business relationships with the following persons (referred to in this Direction as “designated persons”) –

(a) a credit institution situated or incorporated in Iran;

(b) the Central Bank of Iran, also known as Bank Markazi Jomhouri Islami Iran;

2.2 In paragraph 2.1, “branch” means a place of business of a person, other than its head office, which has no legal personality separate from that person, and which carries out directly all or some of the transactions inherent in that person’s business.

Direction to cease business

The Minister directs that a relevant person must not, apart from those exceptions listed in the Schedule to this Direction, –

(a) enter into, or

(b) continue to participate in,

any transaction or business relationship with a designated person.

SCHEDULE

IRAN FINANCIAL RESTRICTIONS

EXCEPTIONS

1) The exceptions set out in this Schedule:

a) are of indefinite duration;

b) may be varied or revoked at any time.

Definitions and interpretation

4) In this Schedule

a) “EU Regulation” means Council Regulation (EU) No 961/2010 on restrictive measures against Iran;

b) “relevant person” and “designated person” have the same meaning as in the Direction;

c) “transfer of funds” includes a transfer, whether made electronically or not, executed in several operations which appear to be linked, as well as a transfer executed in a single operation;

d) “Jersey Order” means the Community Provisions (Restrictive Measures – Iran) (Jersey) Order 2010;

e) a reference to an amount in euro (€) includes a reference to the equivalent amount in another currency;

f) “permitted transaction” means a transfer of funds from one individual to another, each person acting in their private capacity, where the payment is not made in the course of any business relationship or transaction; and

g)“frozen account” means an account of a designated person who is also listed in Annex VII or Annex VIII of the EU Regulation.

HUMANITARIAN BUSINESS RELATIONSHIPS AND TRANSACTIONS	A relevant person may make a transfer of funds to, or receive a transfer of funds from, a designated person, where: a) the sum transferred or received is under €40,000; and b) the funds are for foodstuffs, healthcare, medical equipment or for humanitarian purposes.
PERSONAL REMITTANCES	A relevant person may make a transfer of funds to, or receive a transfer of funds from, a designated person, where: a) the sum transferred or received is under €40,000; and b) the transfer is for the purposes of a permitted transaction. For the avoidance of doubt, this does not displace the requirements under the EU Regulation and the Jersey Order in relation to prior notification of transfers of funds of over €10,000.
INSURANCE/REINSURANCE	Provision of insurance or reinsurance A relevant person may provide insurance or reinsurance to a designated person where such provision is permitted under the EU Regulation and the Jersey Order. Transfers in relation to insurance or reinsurance A relevant person may make a transfer of funds to, or receive a transfer of funds from, a designated person in connection with insurance or reinsurance which is permitted under the EU Regulation and the Jersey Order. For the avoidance of doubt, this does not displace the requirements of Article 21 of the EU Regulation and the Jersey Order.
ASSET FREEZING EXEMPTIONS AND LICENSED ACTIVITIES	Maintaining a frozen account A relevant person may continue to hold a frozen account. Crediting a frozen account A relevant person may credit funds to a frozen account, in accordance with Article 20 of the EU Regulation and the Jersey Order. Licensed activities under the EU Regulation and Jersey Order A relevant person who has, before the date of the Direction, been granted an authorisation by the Chief Minister under the EU Regulation and the Jersey Order may continue to engage in the authorised activities without breaching the requirements contained in the Direction.
HOLDING ACCOUNTS IN THE NAME OF DESIGNATED PERSONS	Maintaining an account A relevant person who holds an account of a designated person (other than a frozen account) immediately before the coming into force of the Direction may continue their business relationship with that designated person only to the extent necessary to hold that account. Reporting requirement A relevant person who holds an account as described above must report that fact to the Chief Minister as soon as reasonably practicable and, in any event, within 14 days of the coming into force of the Direction.

Signed ……………………………………… Date: 5 December 2011

Senator PFC Ozouf,

Minister for Treasury and Resources