US Government Slaps Iran with “Jurisdiction of Primary Money Laundering Concern” Label
The US government has officially designated Iran as a “jurisdiction of primary money laundering concern”, triggering strict new measures aimed at preventing the country’s financial institutions from using US banks to launder money or fund terrorist activities.
Background
The move by the Financial Crimes Enforcement Network (FinCEN) comes after an investigation found that Iran is failing to effectively combat money laundering and terrorist financing. As a result, FinCEN has imposed tough new rules on US financial institutions, requiring them to take extra precautions when dealing with Iranian banks and other financial institutions.
New Rules
The restrictions aim to prevent Iran’s financial institutions from using US banks to process transactions that may be linked to money laundering or terrorist financing. The new rules also require US financial institutions to identify any attempts by Iranian banks to use their correspondent accounts for prohibited activities.
- Prohibition on opening or maintaining correspondent accounts for Iranian banks in the United States
- Enhanced due diligence measures required for all foreign correspondent accounts
Impact on Businesses
Businesses operating in the humanitarian trade sector should be particularly aware of the new rules, which may affect their ability to facilitate trade with Iran. The US government has announced a separate enhanced due diligence process for humanitarian trade with Iran, which requires additional documentation and screening measures.
Broader Effort to Combat Money Laundering and Terrorist Financing
The designation and new rules are part of a broader effort by the US government to combat global money laundering and terrorist financing, and to protect the integrity of the US financial system.
Seek Legal Guidance
For more information on how these changes may affect your business or to seek legal guidance, please contact one of our experienced lawyers at Hogan Lovells.