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| On 24 June 2008, a Decision of the Council of the European Union (the "Council Decision") was published in the Official Journal of the European Union implementing Council Regulation (EC) No 423/2007 concerning restrictive measures against Iran of 19 April 2007 (the "EC Regulation"). As a consequence of this Decision, Melli Bank Plc ("Melli Bank") has been added to the list of persons or entities in Annex V to the EC Regulation who have been determined by the European Council to fulfil the criteria set out in Article 7(2) of the EC Regulation. The effect of the listing is to impose certain financial sanctions, including an asset freeze, on Melli Bank. The Council Decision is given further effect in the UK by the Iran (European Communities Financial Sanctions) Regulations 2007 (the "UK Iran Regulations").
It is not alleged that Melli Bank has breached any UN Security Council Resolution, the EC Regulation or the UK Iran Regulations.
The EC Regulations and the UK Iran Regulations detail the circumstances under which payments can or cannot be made by or to Melli Bank.
HM Treasury has published on its website a notice relating to the Council Decision (the "HM Treasury Notice") and a supplement to such notice which provide information about how the sanctions affect Melli Bank (the "HM Treasury Supplement"). The HM Treasury Notice and HM Treasury Supplement are attached and can also be accessed via the following links:
HM Treasury Notice http://www.hm-treasury.gov.uk/media/A/9/fin_sanc_notice_240608.pdf
HM Treasury Supplement http://www.hm-treasury.gov.uk/media/B/3/fin_sanc_suppnotice_240608.pdf
The position as set out in the HM Treasury Notice and HM Treasury Supplement is summarised below:
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Payments due from Melli Bank
Melli Bank is currently prevented from making any payments unless a licence is obtained from HM Treasury to do so.
HM Treasury have notified the European Commission of their intention to licence payments due from Melli Bank under pre-24 June 2008 contracts.
Applications for payment from persons holding a letter of credit with Melli Bank, including the Hong Kong branch, should be made to HM Treasury using the licence application form in Annex 1 to the HM Treasury Supplement.
Payments due to Melli Bank
Annexed to the HM Treasury Notice is a licence from HM Treasury which allows any person in the United Kingdom to make payments due to Melli Bank under any contract, agreement or obligation that was concluded or arose prior to 24 June 2008 provided that any sums are paid into a frozen account held by Melli Bank. These will include, for example, payments under loan agreements, participations, guarantees, letters of credit and any other instrument which gives rise to a contractual payment obligation to the bank.
Melli Bank is therefore entitled and expects to receive payment of loans and any other contractual payment obligations to the bank in the usual way.
Please contact Mr. James McCall, Compliance Officer, on 020 7397 1659, or the person at Melli Bank with whom you usually deal for further information.
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