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Volume 451: debated on Wednesday 8 November 2006

To ask the Chancellor of the Exchequer what advice the Government gives to UK banks on financial transactions with the Islamic Republic of Iran; and if he will make a statement. (99604)

The UK Money Laundering Regulations require all financial institutions to operate effective controls and due diligence in order to forestall and prevent money laundering and terrorist finance in their dealings with individuals and institutions in all countries—including Iran.

Comprehensive guidance, developed by industry and approved by the Treasury, is provided to all financial institutions that sets out the key safeguards necessary to meet these requirements. The guidance explicitly endorses a risk-based approach by firms that recognises that the threat of financial abuse varies across customers, jurisdictions, products and delivery channels.

This guidance is augmented by liaison between the financial sector, law enforcement bodies, and financial supervisors in order to ensure that anti-money laundering and counter terrorist finance efforts continue to target changing financial vulnerabilities.