Saturday, November 19, 2011


In the midst of calls for the President of the United States to impose sanctions upon the Central Bank of Iran, following the ominous disclosures last week by the IAEA*, regarding Iran's illegal nuclear programme, a US Senator has introduced an amendment to a pending bill that would do just that.

Mark Kirk, a Republican Senator from Illinois, on Thursday filed a Senate Amendment to the Fiscal Year 2012 National Defence Authorisation Act**. Amendment 1084 would require the President to impose sanctions on foreign financial institutions that conduct transactions with the Central Bank of Iran (CBI). The proposal would have a six-month delay on the effective date for petroleum transactions, so as not to destabilise the world oil price structure.

When it becomes law, as is generally expected, either by Executive Order, or this legislation, you can expect the use Iranian sanctions evasion techniques to expand exponentially, and become far more complex. Countries that currently conduct trade with Iran, such as China and North Korea (DPRK), would probably employ even more opaque and indirect methods of payment than occurs at present.

This represents a danger to those financial institutions that fail to identify, on a real-time basis,  a CBI hand in the transactions, and interdict them in progress. The imposition of large fines and penalties by US regulators, or even charges of Providing Material Support to Terrorist Organisations, is a distinct possibility.

Thus, complex international transactions will require more scrutiny by Compliance after passage of this bill, or presidential action. We notify our readers forthwith, should this occur.
*International Atomic Energy Agency
**Senate Bill (S.) 1867

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