Iran Sanctions: Differences in Scope Between the Regulators

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We know that many of the sanctions against Iran are being lifted. We also know that not all regulators are lifting the same sanctions. The EU, the UK’s HMT and the UN are lifting a much broader scope of sanctions than the US’s OFAC (the Office of Foreign Assets Control) is going to lift. This means that there will be inconsistencies across the various regulator lists. Organisations need to be aware of those inconsistencies and the implications of them.

This difference in scope between the US and the other regulators could present some tricky dilemmas for financial institutions. Trading on the global stage means respecting global requirements. Any trades that involve US dollars come under US sanctions requirements, for instance.

The White House has made it clear that primary US sanctions against Iran will remain in place. We estimate that 32% of the 769 entities currently on OFAC’s list will stand. The result of this is that any transactions involving the Government of Iran and financial institutions involving US persons or US dollars will remain blocked by the US. It is this usage of US dollars that could have implications for non-US organisations.

Also, the UN and EU will allow trading with certain organisations that were previously sanctioned, but again, the US is lifting sanctions against a more limited scope of organisations.

Let’s give an example: the UN and EU have said they will lift all sanctions against the Iranian bank, Bank Saderat. However, the US is keeping sanctions in place regarding Bank Saderat, for previously aiding terrorist activities by transferring funds to US designated terror organisations, such as Hezbollah and Hamas. This could potentially become a sticking point for countries that want to have dealings with Bank Saderat, but without falling foul of US regulatory requirements.

Financial institutions have to be mindful of these differences, the inconsistencies and the implications for them.

Looking back:

Post 1. Why banks still need a comprehensive sanctions programme

Post 2. Which sanctions will be lifted?

Looking ahead:

Post 4. The AML policy implications of the deal

Post 5. What happens when Iranian banks reconnect to SWIFT? 



At this stage, nobody knows exactly what changes will take place when Iranian sanctions are lifted. The definitive list will come from the regulators, including the big four (OFAC, EU, UN, HMT) as well as the other agencies which are involved. While the circumstances evolve and the world awaits clarification, Accuity’s infographic aims to break down the sanctions lists and make some predictions based on Accuity’s extensive risk data.