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
- Citation and Commencement: Commences on 28 April 2023 (SL 240/2023)
- Status: Current version (as at 27 Mar 2026)
- Primary Purpose: Implement UN Security Council measures under Resolution 2231 (2015) relating to Iran
- Key Provisions (from extract): Regulations 1–9; especially Regulation 5 (freezing), Regulation 6 (assistance/services/funds prohibitions), Regulation 7 (prior approval requirement for specified persons)
- Schedule: “Designated items” (items/materials/equipment/goods/technology within classes specified)
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 implementing rules for UN Security Council sanctions measures connected to Iran, specifically Resolution 2231 (2015). In practical terms, the Regulations require financial institutions in Singapore (and branches of Singapore-incorporated institutions abroad) to identify “designated persons” and to freeze their funds and other financial assets or economic resources held in the institution’s possession, custody, or control.
Beyond freezing, the Regulations impose conduct prohibitions. They restrict financial institutions from providing assistance, investment/brokering services, insurance/reinsurance, or transferring funds and economic resources where there are reasonable grounds to believe the activity could contribute to “sanctioned activity” in Iran or for the benefit of persons in Iran. The Regulations also introduce a separate regime where certain dealings with “specified persons” require prior written approval from MAS.
Overall, the Regulations are designed to ensure that Singapore-based financial institutions do not inadvertently facilitate prohibited Iranian-related activities, and that they comply with international sanctions obligations through clear operational duties: screening, freezing, and refusal/approval controls.
What Are the Key Provisions?
1. Object, application, and definitions (Regulations 1–4)
Regulation 2 states the object: to assist in giving effect to UN Security Council Resolution 2231 (2015). Regulation 3 provides the scope: the Regulations apply to every financial institution within the meaning of the Financial Services and Markets Act 2022, including a branch outside Singapore of a financial institution incorporated or established in Singapore. This extraterritorial reach (through the Singapore-incorporated institution’s branch) is significant for compliance planning.
Regulation 4 defines key concepts. Notably:
- “designated person” is tied to the UN lists (individuals/entities identified by the Security Council) and is updated dynamically.
- “funds” includes cheques, bank deposits, and other financial resources—so the freezing duty is not limited to cash.
- “specified person” includes the government of Iran, Iranian nationals, entities incorporated in Iran or subject to its jurisdiction, and persons acting on behalf of or directed by such persons, plus entities owned or controlled (directly or indirectly) by them.
- “designated item” refers to items/materials/equipment/goods/technology in the Schedule.
2. Freezing of assets (Regulation 5)
Regulation 5 is the core operational obligation. Subject to limited exceptions in Regulation 5(3), if a financial institution has in its possession, custody, or control in Singapore any funds, other financial assets, or economic resources that are owned or controlled, directly or indirectly, by a designated person, the institution must:
- Immediately freeze all such funds/financial assets/economic resources (Regulation 5(1)(a)); and
- Ensure they are not made available to or for the benefit of the designated person, whether directly or indirectly (Regulation 5(1)(b)).
Regulation 5(2) expands the practical reach by treating funds/financial assets/economic 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 if they were owned or controlled by the designated person. This “control” approach is important for beneficial ownership and group-structure scenarios.
Exceptions and permitted use (Regulation 5(3))
Regulation 5(3) provides circumstances where the freezing requirements do not apply because MAS determines the funds are necessary for specified purposes. From the extract, these include:
- 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 funds/assets/resources.
- 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 directly related to designated items specified in paragraph 2 of Annex B to Resolution 2231 (2015), and approved by the Security Council.
- Payments due under pre-existing contracts entered into before the person became a designated person, provided the contract is not related to designated items and not related to prohibited assistance/training/financial assistance/investment/brokering/services under Annex B, and the payment is not directly or indirectly received by a designated person.
Interest and pre-23 Dec 2006 payments (Regulation 5(4))
Regulation 5(4) allows a financial institution to credit to a frozen account certain amounts—such as interest/earnings due on the account or payments due under a contract/obligation that arose before 23 December 2006. However, once credited, those amounts must be immediately frozen under Regulation 5(1). This ensures that “permitted crediting” does not undermine the freezing regime.
3. Prohibition on assistance, services, funds, assets and resources (Regulation 6)
Regulation 6 imposes a broad prohibition. A financial institution must not provide financial assistance; provide investment/brokering or 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/on behalf of a person or individual in Iran.
The “reasonable grounds” standard is a compliance-critical threshold. It is lower than proof and requires institutions to act when information suggests a plausible link to prohibited activity. Practically, this means that internal risk signals, customer due diligence findings, transaction patterns, or counterparties’ stated purposes may trigger refusal/escalation obligations.
Regulation 6(2) defines “sanctioned activity” as activity related to the design or technology of ballistic missiles capable of delivering nuclear weapons, including any launch by any specified person using ballistic missile technology. This definition is narrower than a general “Iran sanctions” concept; it is technology and missile-related.
4. Prior approval for dealings with “specified persons” (Regulation 7)
Regulation 7 introduces an approval-based regime. Except with the prior written approval of MAS, a financial institution must not do the following where the counterparty is a specified person:
- Provide financial assistance to any specified person (Regulation 7(a));
- Provide investment, brokering, other financial services, or related services including insurance/reinsurance to any specified person (Regulation 7(b));
- Transfer funds, economic resources, financial assets, or financial services to any specified person (Regulation 7(c)).
The extract truncates the remainder of Regulation 7, but the key practitioner takeaway is clear: even where the freezing regime under Regulation 5 might not apply, dealings with “specified persons” can still be prohibited unless MAS approval is obtained. This creates a layered compliance framework: freezing duties for “designated persons” on the UN list, and approval controls for “specified persons” (a broader category tied to Iran and related control/agency relationships).
5. Revocation and saving/transitional provisions (Regulations 8–9)
Regulation 8 revokes earlier instruments (the extract references “revoked” provisions in Regulation 9). Regulation 9 provides saving and transitional provisions—typically intended to preserve the effect of actions taken under the revoked regulations and to manage continuity where designations or obligations change.
How Is This Legislation Structured?
The Regulations follow a standard subsidiary-legislation structure:
- Regulations 1–4: Citation/commencement, object, application, and definitions.
- Regulation 5: Mandatory freezing of assets of “designated persons”, including exceptions and permitted crediting mechanics.
- Regulations 6–7: Conduct prohibitions—(i) a “reasonable grounds” prohibition tied to “sanctioned activity” (Regulation 6), and (ii) an approval requirement for specified dealings with “specified persons” (Regulation 7).
- Regulation 8: Revocation of prior regulations.
- Regulation 9: Saving and transitional provisions.
- The Schedule: “Designated items” (classes of goods/technology relevant to Annex B to Resolution 2231 (2015)).
For practitioners, the Schedule matters because it can affect the scope of permitted activities under Regulation 5(3)(f), where activities directly related to designated items and approved by the Security Council may be carved out from freezing.
Who Does This Legislation Apply To?
The Regulations apply to every financial institution as defined in the Financial Services and Markets Act 2022. This typically includes banks and other regulated financial service providers, and it is not limited to institutions that deal directly with Iran. The obligation is triggered by the institution’s possession, custody, or control of relevant assets in Singapore and by the institution’s information about potential sanctioned activity.
Importantly, Regulation 3 extends application to branches outside Singapore of Singapore-incorporated/established financial institutions. Therefore, compliance programmes must cover group-wide screening and transaction controls, not only local operations.
Why Is This Legislation Important?
For legal and compliance teams, these Regulations translate UN sanctions obligations into enforceable Singapore duties with immediate operational consequences. The freezing requirement in Regulation 5 is framed as an immediate obligation (“must immediately freeze”), which means that delays in screening, escalation, or implementation can create regulatory exposure. Institutions must therefore ensure that their sanctions screening systems can ingest UN list updates and apply freezing without undue lag.
The Regulations also create a dual compliance architecture. First, there is a freezing regime for “designated persons” (UN list-based). Second, there is a prohibition/approval regime for “specified persons” (Iran government/nationals/entities and those acting for or controlled by them). This can catch transactions even where the counterparty is not on the UN list, requiring careful mapping of customer/counterparty categories.
Finally, the “reasonable grounds to believe” standard in Regulation 6 is a practical risk-management trigger. It requires institutions to act on information that suggests a link to ballistic missile-related sanctioned activity. In disputes or regulatory investigations, the institution’s documentation of decision-making—what information was available, what it indicated, and why a transaction was permitted or refused—will be central.
Related Legislation
- Financial Services and Markets Act 2022 (authorising framework; defines “financial institution” and provides enforcement powers)
- Markets Act 2022 (referenced in the metadata; relevant to the broader regulatory ecosystem for markets and financial services)
- UN Security Council Resolution 2231 (2015) (the international sanctions basis implemented by these Regulations)
- JCPOA (Joint Comprehensive Plan of Action; referenced for certain permitted nuclear cooperation projects)
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.