SBP directs banks to submit forex transactions with Iran | Pakistan Today

SBP directs banks to submit forex transactions with Iran

KARACHI – The State Bank of Pakistan (SBP) has asked the authorised foreign currency dealers, in all commercial banks, for details of transactions, under the Asian Clearing Union (ACU) mechanism, with Iran. Sources, privy to the matter, told Pakistan Today that the federal government had taken this initiative through the State Bank and on the behest of its strategic partners in the United States – who wanted to check nuclear proliferation to atomically-ambitious Tehran.
“Iran is in the bad books of the US, that through the Pakistani government, wants to stop nuclear proliferation to Iran,” sources said. The central bank issued, on Tuesday, an EPD Circular Letter No 02 of 2011, asking heads and principle offices of all authorised dealers in foreign exchange for “details of transactions to/from Iran under the ACU arrangement.
A specimen letter, issued by the SBP, to banks on Tuesday proves that the move was aimed at ascertaining and for a check on nuclear proliferation to and from Iran.
“It is, hereby confirmed that payments to and receipts from Iran are not related to proliferation or any other activity pursuant to Article 21, Section 4 of EU Council Regulation 961/2010,” the letter read.
Article 21 of Section B to the Annex VIII of Council Regulation (EU) provides for “restrictive measures” against the Ahmadinejad-led Iran, that most of the western countries, particularly the US, suspect is perusing a covert plan to develop nuclear arsenal. Also attached with the SBP letter are three enclosures that the banks are required to fill and submit to the Chief Manager SBP-BSC (Bank) monthly. The State Bank advised the authorised foreign currency dealers to furnish the requisite details of transactions from November last year onwards. “(The) authorised dealers are advised to furnish the requisite information on the enclosed format from November 2010 and onwards,” the SBP circular said. It added that “Please bring the above to the notice of all your constituents for necessary compliance.” The SBP enclosure requires currency dealers to mention, in the given forms, details of payment transfers made to and from the banks’ ACU and dollar/euro accounts, maintained with concerned Iranian bank, where the “Nostro account” is maintained, through the SBP under ACU mechanism. The SBP forms also require banks to mention details of the payments made for imports, from, and exports to Iran.
ACU is the simplest form of payment arrangements, whereby participants settle payments for intra-regional transactions among the participating central banks on a multilateral basis. Basic objectives of a clearing union are to facilitate payments among member countries, which presently include Pakistan, Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal and Sri Lanka, for eligible transactions and, thereby, economising on the use of foreign exchange reserves and transfer costs, in addition to trade promotion among participating countries.

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