HM Treasury action in relation to Bank Mellat and the Islamic Republic of Iran Shipping Lines
On 12 October 2009, HM Treasury used its powers under the Counter Terrorism Act 2008 to require the UK financial services sector to cease all business with the Iranian Bank Mellat and the Islamic Republic of Iran Shipping Lines, with immediate effect. On 12 October 2009, HM Treasury issued a Written Ministerial Statement by the Exchequer Secretary to the Treasury (Sarah McCarthy-Fry), which explained that it has made a statutory instrument (The Financial Restrictions (Iran) Order 2009) (SI 2009/2725) under the Counter Terrorism Act 2008 containing a direction requiring the UK financial services sector to cease all business with the Iranian Bank Mellat and the Islamic Republic of Iran Shipping Lines (and their branches), with immediate effect.
This means that UK financial and credit institutions will no longer be able to enter into new transactions or business relationships with these entities nor continue with existing transactions or business relationships unless they are licensed by HM Treasury.
HM Treasury also published an interpretative note to assist firms that are or may become involved in transactions or business relationships with either of these two entities, together with three general licenses. The FSA published its own statement about HM Treasury’s action. This reminded firms that they should have appropriate systems and controls in place to meet the requirements of the direction.