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Financial Institution Letters

Office of Foreign Assets Control
Treasury Revokes Iran's "U-Turn" License
FIL-140-2008
December 8, 2008


Summary: The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) amended the Iranian Transactions Regulations (ITR), effective November 10, 2008, by revoking an authorization previously granted to U.S. depository institutions to process "U-Turn" transfers.

Highlights:

  • Effective November 10, 2008, OFAC will no longer allow U.S. depository institutions to process "U-Turn" transfers under the ITR.
  • A "U-turn" transfer consists of:
    (1) Initiating a dollar-denominated transaction offshore by order of a foreign bank's customer;
    (2) Transferring the dollar-denominated amount from a correspondent account held by a domestic bank for the foreign bank to a correspondent account held by another domestic bank for a different foreign bank; and
    (3) Ultimately transferring the funds offshore as a dollar- denominated account of the second foreign bank's customer.
  • Prohibiting "U-Turn" transfers eliminates the financial benefit to Iranian banks or other persons in Iran or the Government of Iran.
  • This amendment does not revoke existing authorizations under the ITR for transactions relating to humanitarian aid and other legitimate activities.
  • OFAC information is available at http://www.treas.gov/offices/enforcement/ofac.
  • If you have questions, please call OFAC's Compliance Programs Division at 1-800-540-6322.

Distribution:
FDIC-Supervised Banks (Commercial and Savings)

Suggested Routing:
Chief Executive Officer
BSA Compliance Officer

Related Topics:
Office of Foreign Assets Control

Attachment:
Iranian Transactions Regulations Amended
http://www.treas.gov/offices/enforcement/ofac/actions/20081110.shtml

Contact:
Anti-Money Laundering Specialist Marie Edwards
at SASFIL@FDIC.gov or (202) 898-3673

Printable Format:
FIL-140-2008 - PDF (PDF Help)

Note:
FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's Web site at http://www.fdic.gov/news/news/financial/2008/index.html.

To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.

Paper copies of FDIC FILs may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, Room E 1002, Arlington, VA 22226 (1-877-275-3342 or 703-562-2200).




Last Updated 12/8/2008 communications@fdic.gov