Task force closes loophole for Iran banks

WASHINGTON, Nov. 6 (UPI) -- An international financial task force Thursday closed the last entry point for Iranian banks to the U.S. financial system, the U.S. Treasury Department said.

Revoking the so-called U-turn license for Iran was necessary because Iran's banks helped finance the country's nuclear and missile programs and terrorist groups, said Stuart Levey, treasury undersecretary for terrorism and financial intelligence.

The international Financial Action Task Force, the world's standard-setting body on combating money laundering and terrorist financing, issued its fourth warning on Iran last month before revoking the U-turn license.

"U-turn transactions allowed U.S. banks to indirectly process payments involving Iran if they began and ended with a non-Iranian foreign bank," Levey said in a statement. "Given Iran's conduct, it is necessary to close even this indirect access."

Many U.S. financial institutions have refused to play host to the U-turn transactions for Iran, Levey said, but Iran used the U-turn exemption to solicit foreign banks to process bank transactions on Iran's behalf.

"With today's action," Levey said, "Iran's potential to manipulate U.S. financial institutions has been significantly curtailed."