OFAC Strengthens Iranian Embargo by Revoking Authorization of "U-turn" Transactions


On November 10, 2008, the Office of Foreign Assets Control (?OFAC?) of the U.S. Treasury Department amended the Iranian Transactions Regulations, 31 C.F.R. Part 560 (the ?ITR?) to strengthen the U.S. embargo against Iran by prohibiting U.S. financial institutions from engaging in ?U-turn? transactions. (See 73 Fed Reg. 66541, November 10, 2008.) U-turn transactions are U.S. dollar transactions involving Iran that are cleared through a U.S. bank. This amendment is intended to prohibit transfers designed to ?dollarize? transactions through the U.S. financial system for the direct or indirect benefit of Iranian banks or other persons in Iran or the Government of Iran.

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