STOCK MARKET WATCH -- Monday, 23 January 2012

[xchrom]

49. New Iran sanctions most threaten non-U.S. banks

http://blogs.reuters.com/financial-regulatory-forum/2012/01/20/new-iran-sanctions-most-threaten-non-u-s-banks/

ST. LOUIS, Jan 20 (Thomson Reuters Accelus) – The U.S. Treasury Department is under bipartisan pressure to draft tough rules implementing an Iranian sanctions law enacted in December. While the effect on U.S. financial institutions is likely to be minimal, foreign financial institutions may take a hit.

“To me, the important question is the extent to which we’ll see non-U.S. banks cut off from the U.S. financial system because of continued processing of transactions involving Iran, particularly Iran’s energy sector, and whether petroleum trading will be pushed into other currencies by Iran,” a former Treasury official told Thomson Reuters. “Watch for changes one to six months from now when more of the law is required to be implemented.”

U.S. lawmakers crafted Section 1245 of the National Defense Authorization Act for fiscal year 2012 to reduce Iran’s oil revenue as punishment for what the United States says is a program to develop a nuclear-weapon capability. Among other things, it prohibits financial institutions from dealing with Iran’s central bank, which acts as the clearinghouse for OPEC’s second-largest oil exporter.

Section 1245 states that U.S. financial institutions should be prohibited from opening or maintaining correspondent or payable-through accounts for any foreign financial institution that has “knowingly conducted or facilitated any significant financial transaction with the Central Bank of Iran.”