Iranian Sanctions Relief in the UK Overseas Territories: An update for Bermuda, BVI and Cayman

This bulletin is an update to our earlier article on implementation of the Joint Comprehensive Plan of Action (JCPOA) across the European Union and related matters of 4 February 2016.

Iran sanctions in UK Overseas Territories: in brief A significant number of EU sanctions and restrictive measures on Iran related to its nuclear programme were lifted across the EU and other states following Implementation Day of the JCPOA on 16 January 2016. 

Through the passing of the Iran (Sanctions)(Overseas Territories) Order 2016 on 15 March 2016 (the 2016 Iran OT Order) the relief from sanctions under Implementation Day has been extended to the UK Overseas Territories as of 17 March 2016.

Following the passing of the 2016 Iran OT Order, the position in the UK Overseas Territories as regards Iranian sanctions is now materially consistent with the position in the European Union. This follows the amendments to Council Regulation (EU) No 267/2012 of 23 March 2012 as amended on Implementation Day by Council Regulation (EU) 2015/1861 and Council Implementing Regulation (EU) 2015/1862 (both of 18 October 2015), which set out the sanctions regime on Iran for its proliferation activities.

Other sanctions on Iran in the UK Overseas Territories covering human rights abuses and terrorist finance activities remain in place and unaffected by the passing of the 2016 Iran OT Order.

About the UK Overseas Territories

Harneys advises on the laws of various UK Overseas Territories principally including Bermuda, the British Virgin Islands and the Cayman Islands. The Overseas Territories are dependent territories of the UK, meaning that the UK is responsible for their foreign relations, security and defence.

Although the UK is an EU member state the UK Overseas Territories, excluding Gibraltar, are not. The UK implements the EU’s Common Foreign and Security Policy in the Overseas Territories through Orders in Council such as the 2016 Iran OT Order.

A note on Bermuda

Due to constitutional arrangements between the UK and Bermuda, the 2016 Iran OT Order and other such Orders implementing the EU Common Foreign and Security Policy do not directly apply to Bermuda. Instead, such Orders in Council are given effect to through amendment of the Bermuda International Sanctions Regulations 2013 by the Bermuda Government locally. As of 15 March 2016 the Bermuda Government has implemented 2016 Iran OT Order in Bermuda through amendment of the 2013 Regulations.

Sanction compliance is a complex and high risk area of law. Financial institutions in the Overseas Territories should consult professional advisers prior to accepting Iranian clients or undertaking trade in Iran or other countries subject to international sanctions. Harneys is the pre-eminent law firm in this area of law across the
BVI, Cayman and Bermuda and we are delighted to answer any questions in this regard.