Measures based on the Foreign Exchange and Foreign Trade Act Following the United Nations Security Council Resolutions on Iran
August 3, 2010
Based on United Nations Security Council (UNSC) resolutions 1737, 1747, and 1803 on Iran’s nuclear issue, the Government of Japan has hitherto been implementing a series of measures on Iran’s nuclear activities. Following the adoption of the UNSC resolution 1929, Japan implements the measures below, under the Foreign Exchange and Foreign Trade Act (hereinafter to be referred to as “the Foreign Exchange Act”), based on the Cabinet approval on August 3, 2010 “Freezing of the Assets of Entities and Individuals Engaged in Iran’s Proliferation Sensitive Nuclear Activities, Prohibition Against Iran’s Nuclear Technology Related Investments , and Measures to Prevent Transfer of Financial Resources Related to the Supply of Large Conventional Weapons to Iran” .
- Measures to freeze assets
A license system (in principle prohibition) is required for payments to the 40 entities and 1 individual engaged in Iran’s nuclear activities designated by the Ministry of Foreign Affairs Notice (issued on August 3rd) and for capital transactions (i.e. contract of money deposit, trust, and money lending) with the designated entities and individuals.(Note 1)
*(Note 1) With this measure, a total of 75 entities and 41 individuals will be subject to measures to freeze the assets as those engaged in Iran’s nuclear activities.
- Measures to prohibit investment
A license system and a prior notification system (in principle prohibition) are required for capital transactions and inward direct investments (Note 3), respectively, by Iran-related entities and individuals (Note 2) investing in stocks of Japanese companies in the industries subject to the measures to prohibit investment by Iran as designated by the Ministry of Foreign Affairs Notice (issued on August 3rd).
*(Note 2) Iranian nationals, legal person established under the Iranian laws, etc.
*(Note 3) Transfer of share (less than 10%) of the listed companies to Iran-related entities and individuals and the acquisition of share (10% or more) of listed companies and of share of non-listed companies by Iran-related entities and individuals.
- Measures to prevent transfer of financial resources
In addition to the existing measures on payments which intends to at contribute to Iran’s nuclear activities, a license system (in principle prohibition) is required for payments for the purpose of contributing to the activities related to the supply of large conventional weapons that are subject to the measures to prevent the transfer of financial resources to Iran as designated by the Ministry of Foreign Affairs Notice (issued on August 3rd);the scope of such payment is also expanded to any payments abroad (from payments to Iran).
Furthermore, the Government of Japan advises financial institutions to secure a definite implementation of the above measures, and also thoroughly conduct customer identifications required by the Foreign Exchange Act and the Prevention of Transfer of Criminal Proceeds and of filing a suspicious transactions reports required by the Act on the Prevention of Transfer of Criminal Proceeds.