The Iran (European Community Financial Sanctions) Regulations 2007

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations, made under section 2(2) of the European Communities Act 1972, enforce provisions of Council Regulation (EC) No 423/2007 of 19th April 2007 (OJ No L 103, 20.4.07 p.1) (“the EC Regulation”) which relate to financial sanctions against persons listed by the Council who are engaged in, directly associated with or providing support for Iran’s proliferation-sensitive nuclear activities or the development of nuclear weapons delivery systems. The measures include the freezing of funds, financial assets and economic resources of such persons and ensuring that any funds, financial assets and economic resources are not made available to them or for their benefit.

The persons against whom these financial sanctions are to apply are listed in Annex V of the EC Regulation, as updated from time to time in accordance with Council Common Position 2007/140/CFSP of 27th February 2007 (OJ No L 61, 28.2.07, p.49). The content of the list in Annex V is established by Council Decision 2007/242/EC of 23rd April 2007 (OJ L 106, 24.4.07, p.51). The EC Regulation also imposes financial sanctions in relation to persons listed in accordance with United Nations Security Council Resolution 1737(2006) dated 23rd December 2006. In the UK, the United Nations financial sanctions are given effect by the Iran (Financial Sanctions) Order 2007 (S.I. 2007/281).

Regulation 3 of these Regulations provides that the persons listed in Annex V of the EC Regulation, as amended from time to time, or designated in accordance with regulation 4 are designated persons for the purposes of the Regulations.

Regulation 4 provides that the Treasury can give directions to designate persons for the purposes of the Regulations if a specified condition is fulfilled in respect of the person. The conditions are that the Treasury have reasonable grounds to suspect that the person is or may be a person listed in Annex V of the EC Regulation; a person acting on behalf of or at the direction of a designated person or a person owned or controlled by a designated person.

Regulation 5 makes further provision about the Treasury’s directions, including a requirement for the Treasury to take the steps which they consider appropriate to publicise the direction. This regulation also includes provision about appeals.

Regulation 6 prohibits any dealing with funds, financial assets and economic resources of designated persons. The regulation makes it a criminal offence to contravene this prohibition.

Regulation 7 prohibits making funds, financial assets or economic resources available to designated persons. The regulation makes it a criminal offence to contravene this prohibition.

Regulation 9 makes it a criminal offence to circumvent the prohibitions or to facilitate the commission of an offence relating to a prohibition.

Regulation 10 provides a licensing procedure to enable, for humanitarian and other purposes, certain acts to be exempted from the prohibitions in regulations 6 and 7.

Regulation 15 gives the Treasury power to delegate their functions under the Regulations (except regulation 4).

Regulation 16 confirms that the provisions of these Regulations apply to the Crown but, in the event of a contravention, the Crown is not criminally liable.

Regulation 18 makes minor amendments to the Iran (Financial Sanctions) Order 2007 (S.I. 2007/281), consequential upon the manner in which the EC Regulation is enforced under these Regulations.

The Schedule makes provision about information and evidence.

A partial regulatory impact assessment of the effect that this instrument will have on the costs of business may be obtained from the Asset Freezing Unit of the Financial Crime Team, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ and is also available on HM Treasury’s website (www.hm-treasury.gov.uk). A copy of the regulatory impact assessment has been placed in the libraries of both Houses of Parliament.