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USA and EU over Iran deal

Germany, UK and France, developed a system to shield institutions against US sanctions to Iran (Instex).

If Instex enters into effect, the USA will most likely react to the European vehicle with enhancement and enforcement of sanctions making ineffective the shield system.

Sigal Mandelker (Treasury Department undersecretary for terrorism and financial intelligence) noted that “Engaging in activities that run afoul of U.S. sanctions can result in severe consequences, including a loss of access to the U.S. financial system.”

In addition the department noted the system to be a deceptive practice to circumvent sanctions and that  “entities that transact in trade with the Iranian regime through any means may expose themselves to considerable sanctions risk, and Treasury intends to aggressively enforce our authorities.”

Secretary of State, Mr. Michael Pompeo noted that Iranian sanctions exclude humanitarian and medical products, therefore, the Instex system should not be needed.

Nonetheless, any transaction within the scope of sanctions will have applicable consequences to all parties involved in eluding shareholders in application of standard OFAC rules.

The system, if ever into effect, will be under the scrutiny of the department and may prompt further sanctions or more complex sanctions schemes.

Source

https://www.bloomberg.com/amp/news/articles/2019-05-29/u-s-warns-europe-that-its-iran-workaround-could-face-sanctions

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Jaime Prieto

Mr. Jaime Prieto is a lawyer experienced in Financial Crime, Anti-Money Laundering and Counter Terrorism Financing having extensive professional experience in both public and private sectors. Mr. Prieto has been a Head of Compliance in the European Union, the Americas and the Caribbean for banks, trust companies, asset managers, Big Four audit and advisory firms, RegTechs, government agencies and other types of financial professionals. In addition to his experience, he has been legal and educational chair in several compliance and sectorial organisations and performed as a teacher and speaker for a number of organisations and in several local and international forums. Furthermore, Mr. Prieto is an experienced Money Laundering Reporting Officer anda Data Protection officer with additional experience in risk management.
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