CONFIDENTIAL
BANK OF ENGLAND Threadneedle Street
London
EC2R 8AH
22 May 1980
Сору
to HK+GD
WIAD
R G Lavelle Esq
HM Treasury
Parliament Street
London
SW1P 3AG
Dear Roger
IRAN SANCTIONS:
DEPENDENT TERRITORIES
меся
with copy of Mr. Melatyne's
letter.
Grateful for the views of the geographical departimento
concerned.
Diky:
scom
FRD. 24/5
We have been giving some thought to the question of extending to the UK's dependent territories (DOTS) the voluntary financial measures against Iran, referred to in McIntyre's letter of 20 May to Lyscom, copied to Webster here.
With mandatory legal sanctions being extended to the DOTS, we are quite clear that, in principle, the banking measures which are in place on a voluntary basis here should for consistency be extended likewise, where appropriate.
We see no point, however, in having elaborate and unnecessary machinery to apply these measures in places like Ascension or Pitcairn Island. Common sense suggests that most DOTS can be dismissed forth- with on "de minimis" grounds as having little or no banking connections with Iran.
ته
We
The test for application of the measures in other DOTS is whether they would to any significant degree constrain Iranian financial operations, if implemented on the same basis used in the UK (informal guidance; selected banks; British-owned -ie. locally-owned - banks only). can see considerable disadvantage in proposals which, for example, would involve a written code the detailed guidelines are, and in our view should remain, confidential. Likewise, blanket coverage is both undesirably cumbersome and unnecessary; in the UK we have covered over 90% of British banks' business in Iran through the English and Scottish clearers, to whom we are about to add three others, making ten banks/groups in all. (We are, however, at present considering whether the guidelines should be notified, in outline only, to the generality of British banks.) Symmetry would also require the guidelines to be notified, in the DOTS, only to locally-owned banks.
While the constitutional modalities of extending UK legislation to DOTS are straightforward enough, there might be awkwardness in getting some DOTS to pass on informal guidance to banks on behalf of HMG, or