Sweden Explains It All: EU Iran Nuclear Sanctions Details (Part 4 of 5)

Part O: Financial Transactions

Since autumn 2010, a comprehensive system of prohibitions and controls of various financial transactions to and from Iranian banks, persons and other entities and bodies has been introduced. This system is now primarily regulated in Articles 30, 30a and 30b of Council Regulation (EU) No 267/2012, and is outlined in brief below. It should be noted that in cases where the assets of Iranian banks and financial institutions have been frozen, special regulations apply that, in principle, constitute a prohibition on financial transactions with those on the list (see point N), except where a competent authority has granted special authorisation under the regulations on the freezing of assets.

The basic principle is that financial transactions (transfers of funds) between European banks and financial institutions and their Iranian counterparts that are not subject to the freezing of assets of amounts equalling and exceeding EUR 10 000 are prohibited unless they primarily concern: a) transfers regarding foodstuffs, healthcare, medical equipment, or for agricultural or humanitarian purposes; b) transfers regarding personal remittances; c) transfers in connection with a specific trade contract that does not otherwise contravene the sanctions (legitimate trade); d) transfers for official purposes regarding diplomatic and consular posts or international organisations; or e) repayment of debts that do not otherwise contribute to the activities that are prohibited under the sanctions.

However, such transactions between banks and financial institutions, though in themselves permitted, can require prior authorisation from the competent authority, depending on the purpose of the transaction and the sum involved. Transfers of up to EUR 10 000, regardless of the purpose, do not require prior notification or authorisation. Transfers for transactions regarding foodstuffs, healthcare, medical equipment, or for agricultural or humanitarian purposes, of less than EUR 100 000 and personal remittances of less than EUR 40 000 do not require prior authorisation, but should be notified (if they equal or exceed EUR 10 000). Transfers for these purposes that exceed the stated sums require prior authorisation from the competent authority. All other such transactions that are, in themselves, permitted require prior authorisation if they equal or exceed EUR 10 000.

Financial transactions (transfers of funds) to and from other Iranian persons and entities are, as a basic principle, permitted. However, prior authorisation from the competent authority or prior notification may be required. Such transactions regarding foodstuffs, healthcare, medical equipment, or for agricultural or humanitarian purposes, do not require prior authorisation. However, they must be notified in the usual manner if they equal or exceed EUR 10 000. All other such transfers require prior authorisation if they equal or exceed EUR 40 000 (and must be notified in advance if they equal or exceed EUR 10 000).

Requests for authorisation and notifications are usually submitted via the bank in question in the EU. This may therefore be the EU bank of either the payee or the payer, depending on the direction in which the transfer in question is to be made. The controls to be exercised by the competent authority aim to prevent such transactions contributing to any activities prohibited under the various sanctions. Authorisation should be granted for transactions that are not judged to contribute to such activities. The Swedish Agency for Non-Proliferation and Export Controls has been appointed the competent authority in Sweden to examine requests for authorisation and receive notifications in accordance with Articles 30 and 30a.

In addition to the authority controls described above, under Article 30(6) of Council Regulation (EU) No 267/2012 banks and financial institutions in the EU are obliged to exercise special vigilance over movements in Iranian accounts.

Part P: Other Banking Restrictions

Article 33 of Council Regulation (EU) No 267/2012 contains a number of restrictions on relationships between banks in the EU and Iranian banks. It is prohibited for credit and financial institutions in the EU to open new accounts with Iranian banks, establish new correspondent banking relationships with Iranian banks, establish new joint ventures with banks in Iran or open new representative offices in Iran. Corresponding prohibitions apply for Iranian banks' activities in the EU. In cases where Iranian banks already have branches or subsidiaries in the EU they are required to submit notifications in accordance with Article 31.

With regard to the banking sector, it is also important to note that the assets of an increasing number of Iranian banks have been frozen in accordance with decisions of the UN Security Council or the EU, and it has thereby become prohibited to make funds available to them. The Iranian banks subject to this prohibition under Article 23 of Regulation (EU) No 267/2012 are listed in Annexes VIII and IX of the Regulation (see point N).

Part Q: Iranian bonds

Under Article 34 of Council Regulation (EU) No 267/2012, it is prohibited to directly or indirectly sell, purchase or broker bonds issued in Iran to or from the Government of Iran or its public bodies etc., Iranian banks and Iranian legal persons or natural persons acting on behalf of them.

Part R: Insurance and Reinsurance

Under Article 35 of Council Regulation (EU) No 267/2012, it is prohibited to provide or broker insurance or reinsurance to the Iranian Government or its agencies etc., to Iranian legal persons, or to natural persons representing any of these. Insurance agreements concluded before the Regulation entered into force continue to apply, but may not be renewed. Third party insurance and other insurance that is obligatory in the EU is exempt from this prohibition, along with certain travel insurance policies.

Part S: Iranian transport sector

In order to prevent the transfer of goods and technologies that are prohibited for supply to and from Iran, the rules on the monitoring of goods transportation by ship or aircraft to or from Iran have gradually become more stringent since 2008 – all goods transports are now monitored. Under Article 15 of Council Decision 2010/413/CFSP, this increased monitoring involves special inspections of cargo in EU sea ports and airports where there is a suspicion that they may be illegal. Results are to be reported to the Security Council. Under Article 36 of Council Regulation (EU) No 267/2012, all such cargo must be declared using special procedures before it arrives at or departs from sea ports or airports in the EU. The competent authority to receive customs declarations is Swedish Customs.

Certain services, such as bunkering or technical maintenance of Iranian-owned vessels and cargo aircraft, are prohibited where there is a suspicion of smuggling (Article 37 of the Regulation). Smuggled goods may be seized and disposed of. With regard to Iranian oil tankers and cargo vessels, under Article 37a of the Regulation it is furthermore prohibited to provide classification services of any kind, participate in construction and maintenance of such vessels, or inspect or certify marine equipment etc. Under Article 37b of the Regulation it is also prohibited to make available vessels designed for the transport or storage of oil and petrochemical products to Iranian persons, entities and bodies (with certain exceptions).

Another factor of relevance to shipping is that assets linked to the Islamic Republic of Iran Shipping Line (IRISL) and its subsidiaries are to be frozen (see point N), in accordance with Security Council Resolution 1929 (2010) and Article 23 of Regulation (EU) No 267/2012 (Annexes VIII and IX).

With regard to aviation, under Article 17 of Council Decision 2010/413/CFSP the EU Member States are to take the necessary measures, in accordance with their national legislation and international agreements, to prevent access to airports for cargo flights operated by Iranian carriers or originating from Iran. However, this requirement does not apply to mixed cargo and passenger flights. This prohibition has been implemented in national law through the ordinance concerning certain sanctions against Iran (2007:704).

The prohibition concerning insurance is also relevant here (see point R).

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