UK severs financial relationship with Iran
by Gill Montia
Story link: UK severs financial relationship with Iran
The UK has severed its financial relationship with Iran.
In a statement yesterday, HM Treasury said: “From 15:00 on Monday 21st November 2011, all UK credit and financial institutions are required to cease business relationships and transactions with all Iranian banks, including the Central Bank of Iran, and their branches and subsidiaries.”
This is the first time that the UK has cut off an entire country’s banking sector and the move underlines government concerns over Iran’s activities regarding the development of nuclear weapons.
According to the Treasury, Iranian banks play a crucial role in providing financial services to individuals and entities within Iran’s nuclear and ballistic missile programmes, as companies carrying out such activities need banking services.
The UK’s financial restrictions, which are being taken in tandem with other countries, will therefore make it more difficult for Iranian banks to use the international financial system to such ends.
The case for action has been underlined by recent calls from the Financial Action Task Force for countries to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism risks emanating from Iran.
Foreign Secretary, William Hague, commented: “We have consistently made clear that until Iran engages meaningfully, it will find itself under increasing pressure from the international community.”
He added: “The swift and decisive action today coordinated with key international partners is a strong signal of determination to intensify this pressure.”