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CONFIDENTIAL
FM FCO 271205Z JUNE 80
TO IMMEDIATE HONG KONG
TELEGRAM NUMBER 510 OF 27 JUNE
INFO PRIORITY BRUSSELS (FOR BURGESS) WASHINGTON (FOR CROWSON)
UKMIS GENEVA (FOR CHAU).
-
YOUR TEL NO 786 OF 19 JUNE IRAN: VOLUNTARY FINANCIAL MEASURES
1. IN UK, GUIDANCE HAS BEEN GIVEN ONLY TO BRITISH-OWNED BANKS.
THIS REFLECTS THE 'PARENTAL RESPONSIBILITY' PRINCIPLE WHICH IS
NOW WIDELY ACCEPTED IN THE CONTEXT OF INTERNATIONAL BANKING
SUPERVISION, IE WE ASSUMED THAT FOREIGN BANKS IN LONDON WOULD
BE COVERED (WHERE APPROPRIATE) BY THE SIMILAR MEASURES BEING
INTRODUCED IN THEIR HOME TERRITORIES. THIS EXPLAINS WHY IN
DEPENDENT TERRITORIES WE CONSIDER GUIDANCE SHOULD BE GIVEN TO
LOCALLY-OWNED BANKS ONLY. FURTHER, IN UK ONLY THOSE BRITISH-
OWNED BANKS WITH SIGNIFICANT BUSINESS RELATIONSHIPS WITH IRAN
HAVE BEEN APPROACHED (A QUITE SMALL NUMBER OF BANKS ACCOUNT FOR
99 PER CENT OF UK BANKING BUSINESS WITH IRAN).
2. I CONFIRM THAT THE VOLUNTARY MEASURES ARE CONSIDERED TO APPLY
TO OVERSEAS BRANCHES AND SUBSIDIARIES OF BRITISH BANKS.
3. NO ACTION IS BEING TAKEN IN RELATION TO IRANIAN BANKS IN UK,
WHOSE BUSINESS HAS IN MOST CASES BEEN AT AN EXTREMELY LOW LEVEL
SINCE THE REVOLUTION.
4. IN VIEW OF FOREGOING, YOU MAY WELL FEEL THAT IT WOULD BE
CONSISTENT WITH APPROACH IN LONDON, AND APPROPRIATE FOR YOUR
PURPOSES, MERELY TO SPEAK TO THE THREE MAIN LOCALLY-OWNED BANKS,
PLUS CHARTERED. SEEN FROM HERE, INCLUSION OF DEPOSIT-TAKING
INSTITUTIONS DOES NOT, REPEAT NOT, SEEM NECESSARY, UNLESS THERE
ARE INSTITUTIONS WITH A SIGNIFICANT AMOUNT OF IRANIAN BUSINESS.
5. AS MINISTERIAL SPEECHES DURING SANCTIONS DEBATES HAVE MADE
PLAIN, GUIDELINES ARE LINKED TO THE FINANCIAL ITEMS IN UN
SECURITY COUNCIL RESOLUTION OF LO JANUARY, AND RELATE IN THE
MAIN TO NEW LOANS AND DEPOSIT FACILITIES. INTENTION IS NOT TO
PREVENT ANY BUSINESS AT ALL WITH IRAN, RATHER TO LIMIT SIGNIFIC-
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CONFIDENTIAL
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