WASHINGTON Nov 6 The U.S. Treasury on Thursday
moved to close off one of Iran's last available entry points
into the U.S. financial system by revoking its license for
"U-turn" bank transfers, which briefly enter the United States
before being sent to offshore banks.
The Treasury said the action was aimed at increasing
financial pressure on Tehran to end alleged support of
terrorist groups as well as nuclear and missile proliferation.
The move bans U.S.-licensed banks from handling such
transfers made on behalf of Iranian entities by non-Iranian
"This regulatory action will close the last general entry
point for Iran to the U.S. financial system," the Treasury said
in a statement.
The U-turn exception was started after the United States
imposed general trade sanctions on Iran in 1979 to allow
certain dollar-based Iranian transactions to proceed.
But Stuart Levey, the Treasury's Undersecretary for
Terrorism and Financial Intelligence, said Tehran was abusing
the loophole to skirt sanctions on a number of Iranian banks
and other entities.
By processing the payments through the United States, Iran
was able to lure foreign banks into handling transactions on
"Given Iran's conduct, it is necessary to close even this
indirect access," Levey said.
At a news conference, he declined to estimate how much
money was transferred through the U-turn loophole, but noted
that such transactions have declined in recent years as
sanctions on Iran have been stepped up.
Banks from all over the world, including Europe, the Middle
East and Asia, were handling such transactions, Levey said.
The United States already prohibits U-turn transactions by
Iranian state-owned banks Melli, Mellat, Sepah, Future Bank and
the Export Development Bank under previous sanctions that
prohibit all transactions by U.S. banks.
Thursday's action will end the exception for all remaining
Iranian banks, both state-owned and private, including Iran's
central bank, Treasury said.
However, the Treasury will allow U.S. banks to handle
indirect fund transfers on behalf of the Iranian government or
persons to send funds to family members, for humanitarian
relief purposes, for travel-related remittances and other
transactions that have special permission from the Treasury.
(Reporting by David Lawder; editing by Gary Crosse)