The Financial Crimes Enforcement Network (“FinCEN”) issued a final regulation (the “Final Regulation“) to implement Section 104(e) of the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 (“CISADA”). The Final Regulation requires banks in the U.S. and U.S. offices of foreign banks, upon request from FinCEN, to inquire of a specified foreign bank for which the U.S. bank maintains a correspondent account and report to the Department of the Treasury whether the specified foreign bank: (1) maintains a correspondent account for an Iranian-linked financial institution designated under the International Emergency Economic Powers Act (“IEEPA”); (2) has processed one or more transfers of funds within the preceding 90 calendar days for or on behalf of, directly or indirectly, an Iranian-linked financial institution designated under IEEPA, other than through a correspondent account; or (3) has processed one or more transfers of funds within the preceding 90 calendar days for or on behalf of, directly or indirectly, Iran’s Islamic Revolutionary Guard Corps or any of its agents or affiliates designated under IEEPA.
Under the Final Regulation, the U.S. bank, upon FinCEN’s request, must request that the applicable foreign bank agree to notify the U.S. bank within 30 days if the foreign bank subsequently establishes a new correspondent account for an Iranian-linked financial institution designated under IEEPA at any time within 365 days from the date of the foreign bank’s initial response to the U.S. bank. The U.S. bank must then report the information received to FinCEN.
The Final Regulation provides a form of certification for use by the U.S. bank when making the information request to the foreign bank. The Final Regulation recognizes that CISADA does not compel the foreign bank to respond to a request by a U.S. bank, but the Final Regulation implies that foreign banks that do not comply with requests from U.S. banks will be subject to unspecified sanctions. The Final Regulation became effective on October 11, 2011.