To ask the Chancellor of the Exchequer what steps will have to be taken by the UK in response to the 25 October designation of Bank Melli and its branches and subsidiaries by the United States in relation to proliferation activities and support for terrorism. (163897)

The United States sanctions of 25 October against Iranian individuals and entities are domestic measures that are not part of UK law.

The UK takes seriously the risks to the financial system posed by Iran’s lack of a comprehensive anti-money laundering and counter-terrorist finance (AML/CTF) system. At the recent meeting of the financial action task force, the international standard setting body currently chaired by the UK, FATF members issued a public statement to express concerns that Iran represents a significant vulnerability within the international financial system. FATF members are advising their financial institutions to take the risk arising from deficiencies in Iran’s AML/CTF regime into account for enhanced due diligence. The Treasury has issued guidance to this effect to financial institutions in the UK.