Statute Details
- Title: Financial Services and Markets (Sanctions and Freezing of Assets of Persons — Iran) Regulations 2023
- Act Code: FSMA2022-S240-2023
- Type: Subsidiary legislation (SL)
- Enacting authority: Monetary Authority of Singapore (MAS)
- Authorising Act: Financial Services and Markets Act 2022
- Legal basis: Powers under section 192, read with sections 15(1)(b) and 219(d) of the Financial Services and Markets Act 2022
- Commencement: 28 April 2023
- Status: Current version (as at 27 Mar 2026)
- Primary purpose: Implement UN Security Council Resolution 2231 (2015) measures relating to Iran, including freezing obligations and prohibitions on assistance and financial services
- Key provisions (from extract): Regulation 5 (freezing), Regulation 6 (prohibition on assistance/services/funds), Regulation 7 (prohibition on provision/transfer of financial services without MAS approval), Regulation 8 (revocation), Regulation 9 (saving and transitional provisions)
- Schedule: “Designated items” (items/materials/equipment/goods/technology within classes described in the Schedule)
What Is This Legislation About?
The Financial Services and Markets (Sanctions and Freezing of Assets of Persons — Iran) Regulations 2023 (“Iran Sanctions Regulations”) are Singapore’s regulatory instrument for implementing targeted sanctions connected to Iran under United Nations Security Council Resolution 2231 (2015). In practical terms, the Regulations impose mandatory “freeze” duties and strict prohibitions on financial institutions when they deal with funds, financial assets, economic resources, or financial services that may be linked to designated persons or sanctioned activities.
The Regulations apply to “financial institutions” as defined by the Financial Services and Markets Act 2022, and they extend to branches outside Singapore of financial institutions incorporated or established in Singapore. This extraterritorial reach is important for banks, payment providers, wealth managers, and other regulated entities with cross-border operations: compliance must be maintained not only for Singapore-based accounts, but also for relevant holdings and controls wherever the institution operates.
At the heart of the regime are three compliance themes: (1) identifying designated persons and designated items; (2) freezing and preventing access to frozen assets; and (3) preventing the provision of assistance, services, or financial transfers that could contribute to sanctioned activity in Iran (including ballistic missile-related activity). The Regulations also provide limited exceptions where MAS determines that certain payments or activities are necessary, such as basic expenses or specific nuclear cooperation projects under the JCPOA framework.
What Are the Key Provisions?
1) Definitions and dynamic “designated person” status (Regulation 4)
The Regulations define key terms including “designated item”, “designated person”, “funds”, “specified person”, “UN List”, and “JCPOA”. The “UN List” is the Security Council’s list of individuals/entities subject to the measures in Annex B of Resolution 2231 (2015), and it is updated from time to time on the official UN website.
For practitioners, the most operationally significant aspect is how designation changes take effect. Where an individual/entity is added to the UN List on or after 28 April 2023, the person is treated as a “designated person” with effect from the day immediately following the date of addition. Conversely, removal from the UN List ends designated status with effect from the date of removal. Where particulars are modified, the modifications take effect from the day immediately following the date of modification. This creates a compliance obligation to monitor updates and ensure screening systems and internal controls can react quickly.
2) Mandatory freezing of assets (Regulation 5)
Regulation 5 imposes a strict duty on any financial institution that has “in its possession, custody or control in Singapore” any funds, other financial assets, or economic resources owned or controlled, directly or indirectly, by a “designated person”. The institution must (a) immediately freeze the relevant funds/assets/resources; and (b) ensure they are not made available to or for the benefit of the designated person, whether directly or indirectly.
The freezing obligation is broadened by Regulation 5(2), which treats funds/assets/resources held by entities owned or controlled by a designated person, or held by individuals/entities acting on behalf of or under the direction of a designated person, as being owned or controlled by the designated person. This “look-through” approach is designed to prevent circumvention through intermediaries.
Exceptions and MAS determinations (Regulation 5(3))
Regulation 5(3) provides that the freezing requirements do not apply to funds/assets/resources that MAS has determined are necessary for specified purposes. The extract lists several categories, including:
- Basic expenses (foodstuff, rent, mortgage discharge, medicine, medical treatment, taxes, insurance premiums, public utility charges);
- Reasonable professional fees and reimbursement of expenses for legal services;
- Routine holding/maintenance charges for frozen assets;
- Extraordinary expenses (subject to MAS determination);
- Civil nuclear cooperation projects described in Annex III of the JCPOA;
- Judicial/administrative/arbitral liens or judgments (with conditions: lien/judgment arose or was entered prior to 23 December 2006 and is not for the direct or indirect benefit of a designated person);
- Activities related to designated items specified in paragraph 2 of Annex B to Resolution 2231 (2015), but only if approved by the Security Council;
- Payments due under pre-existing contracts entered into by a person before becoming a designated person, provided the contract is not related to designated items or prohibited assistance/services under Annex B, and payment is not received directly or indirectly by a designated person.
Interest/earnings and pre-23 Dec 2006 payments (Regulation 5(4))
Even where an account is frozen, Regulation 5(4) permits a financial institution to credit interest/earnings due on the frozen account, and certain payments due under contracts/obligations that arose before 23 December 2006. However, once credited, the interest/earnings/payment must be immediately frozen under Regulation 5(1). This ensures that economic benefits do not escape the freeze.
3) Prohibition on assistance and related financial services (Regulation 6)
Regulation 6 is a “risk-based” prohibition. A financial institution must not provide financial assistance, investment/brokering/other financial services (including insurance or reinsurance), or transfer funds/economic resources/financial assets/financial services where the institution has information that provides reasonable grounds to believe that the assistance/services/funds/resources/assets could contribute, directly or indirectly, to any sanctioned activity in Iran or by or on behalf of a person or individual in Iran.
The definition of “sanctioned activity” in the extract is focused on ballistic missiles capable of delivering nuclear weapons, including any launch by any specified person using ballistic missile technology. This is significant because it ties the prohibition not only to designated persons, but also to the potential contribution to a particular type of prohibited activity. Practically, this elevates the importance of enhanced due diligence, transaction monitoring, and information-sharing within compliance teams to determine whether there are “reasonable grounds to believe” that a transaction could contribute to such activity.
4) Prohibition on provision or transfer of financial services without MAS approval (Regulation 7)
Regulation 7 adds another layer: except with prior written approval of MAS, a financial institution must not provide financial assistance, provide investment/brokering/other financial services (including insurance/reinsurance), or transfer funds/economic resources/financial assets/financial services to any specified person. The extract indicates that Regulation 7 is designed to control dealings with a broader category than “designated persons” (as “specified person” includes the government of Iran, nationals of Iran, entities incorporated in Iran or subject to its jurisdiction, and persons acting on behalf of or owned/controlled by such persons).
Although the extract truncates the remainder of Regulation 7, the practitioner takeaway is clear: where dealings involve “specified persons”, MAS approval is required. This creates a clear governance pathway—requests for approval should be documented, supported by compliance assessments, and processed through internal escalation channels.
How Is This Legislation Structured?
The Regulations follow a conventional sanctions instrument structure:
- Part/Regulation 1: Citation and commencement (28 April 2023).
- Regulation 2: Object—assisting in giving effect to UN Security Council Resolution 2231 (2015).
- Regulation 3: Application—applies to every financial institution under the Act, including relevant foreign branches.
- Regulation 4: Definitions—key terms, including dynamic “designated person” status tied to the UN List.
- Regulation 5: Assets of certain persons to be frozen—mandatory freeze duty, exceptions, and treatment of interest/earnings.
- Regulation 6: Prohibition against provision of assistance/services/funds/assets/resources—reasonable grounds to believe contribution to sanctioned activity.
- Regulation 7: Prohibition against provision or transfer of financial services, etc.—no dealings with specified persons without MAS prior written approval.
- Regulation 8: Revocation—revokes earlier related regulations (not shown in the extract).
- Regulation 9: Saving and transitional provisions—preserves certain effects or arrangements during transition (not shown in the extract).
- The Schedule: “Designated items” used to determine whether certain activities/payments may be permitted under the sanctions framework.
Who Does This Legislation Apply To?
The Regulations apply to every financial institution within the meaning of section 2 of the Financial Services and Markets Act 2022. This typically includes entities such as banks and other regulated financial services providers, and it also covers branches outside Singapore of financial institutions incorporated or established in Singapore.
Accordingly, the compliance perimeter is broad. Even if the transaction occurs outside Singapore, the institution may still have obligations if it has possession, custody, or control in Singapore of relevant funds/assets/resources, or if it provides services that could contribute to sanctioned activity in Iran or by persons in Iran. For multinational groups, legal and compliance teams should map where “possession, custody or control in Singapore” exists (e.g., custody accounts, correspondent banking relationships, or group treasury structures).
Why Is This Legislation Important?
These Regulations operationalise UN sanctions in Singapore’s financial sector. For practitioners, the most consequential features are the immediacy of the freezing duty and the breadth of prohibited conduct. “Immediately freeze” is not a “best efforts” standard; it requires rapid internal escalation, screening, and execution of freeze instructions once a match is identified and the institution has the relevant information.
Second, the Regulations combine designation-based restrictions (freezing and dealings with designated persons) with activity-based restrictions (prohibitions where there are reasonable grounds to believe the conduct could contribute to ballistic missile-related sanctioned activity). This means compliance cannot rely solely on name screening; it must also consider transaction purpose, counterparties, and contextual information.
Third, the Regulations provide structured exceptions and an approval pathway. MAS determinations under Regulation 5(3) and MAS prior written approval under Regulation 7 create controlled flexibility, but they also impose a procedural burden: institutions must be able to justify why an exception applies or why approval should be granted, and they must ensure that any permitted payments are consistent with the conditions (including non-benefit to designated persons and the “immediately freeze” requirement for credited interest/earnings).
Related Legislation
- Financial Services and Markets Act 2022 (authorising Act; defines “financial institution” and provides MAS powers)
- Markets Act 2022 (listed in metadata; relevant to the broader regulatory framework for markets and financial services)
- UN Security Council Resolution 2231 (2015) (the international sanctions basis implemented through these Regulations)
- JCPOA (Joint Comprehensive Plan of Action) (referenced for nuclear cooperation project exceptions)
Source Documents
This article provides an overview of the Financial Services and Markets (Sanctions and Freezing of Assets of Persons — Iran) Regulations 2023 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.