Alert November 18, 2008

OFAC Revokes Authorization to Process “U-turn” Transfers Involving Iran

OFAC has revoked a general license which permitted U.S. depository institutions to process “U-turn” transfers involving Iran.  A “U-turn” transfer is a dollar-denominated transfer that starts at one non‑U.S., non-Iranian bank, moves through correspondent accounts at U.S. banks, and ends at a second non‑U.S., non-Iranian bank.  OFAC’s action is intended to prevent transfers made by Iranian parties to dollarize transactions through the U.S. financial system.  OFAC’s action broadens the scope of previous actions that prohibit U-turn transactions involving two Iranian banks, Bank Saderat and Bank Sepah.