The Iran (Financial Sanctions) Order 2007

EXPLANATORY NOTE

(This note is not part of the Order)

This Order, made under section 1 of the United Nations Act 1946, gives effect in the United Kingdom to resolution 1737(2006) of the Security Council of the United Nations adopted on 23rd December 2006 (“the Resolution”).

Under the Resolution, various persons are designated in an Annex and the Security Council and a committee of the Security Council (the “Committee”) can designate persons. States are required to take measures in respect of any designated person and any person or entity acting on his behalf or at his direction, or by entities owned or controlled by him. 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 Security Council and the Committee can designate persons 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.

Article 3 of this Order provides that the persons designated in the Annex to the Resolution, by the Security Council, the Committee or, in accordance with article 4, the Treasury are designated persons for the purposes of the Order.

Article 4 provides that the Treasury can give directions to designate persons for the purposes of the Order if one of the specified conditions 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 designated in the Annex to the Resolution; by the Security Council or the Committee; a person acting on behalf of or at the direction of any such person or a person owned or controlled by any such person.

Article 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 article also includes provision about appeals.

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

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

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

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

Article 15 gives the Treasury power to delegate its functions under the Order.

Article 17 confirms that the provisions of this Order apply to the Crown but, in the event of a contravention, the Crown is not criminally liable.

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.