Sanctions Related to Proliferation of Weapons of Mass Destruction (WMD)
The UNSC also imposed sanctions on individuals or entities involved in the proliferation of WMD and related activities. Individuals or entities are prohibited from being involved or associated with any individuals or entities designated under the WMD sanctions.
What sanctions have been issued?
The sanctions on Iran were implemented through UNSC Resolutions 1737 (2006), 1747 (2007), 1803 (2008), 1929 (2010) and successive Resolutions. Previously, UN Member States were required to adopt several measures including instituting asset freezing on designated persons (also applies to any individuals or entities acting on behalf of, or at the direction of, the designated persons, and to entities owned or controlled by them), imposition of travel bans and a ban on export/procurement/supply of any arms and related materials to/from Iran. Additionally, Member States were also advised to exercise vigilance over transactions involving Iranian banks, including the Central Bank of Iran, and when doing business with entities incorporated in Iran or subject to Iran’s jurisdiction, such as the Islamic Revolutionary Guard Corps (IRGC) as well as the Islamic Republic of Iran Shipping Lines (IRISL). These obligations were previously made effective via various circulars issued by BNM under the Exchange Control Act 1953 and Central Bank of Malaysia Act 2009.
On 14 July 2015, the implementation of a Joint Comprehensive Plan of Action (JCPOA) was concluded. As a result, Resolution 2231 (2015) was adopted on 20 July 2015. In essence, it was agreed that previous UNSC sanctions imposed on Iran shall be terminated, upon satisfaction by the International Atomic Energy Agency (IAEA) that Iran has taken necessary actions agreed under the JCPOA. On 16 January 2016, all UNSC sanctions against Iran were terminated, resulting in the removal of a large number of persons and entities from the 1737 list. The activity-based sanctions and vigilance measures in the previous Resolutions were also removed. Nevertheless, the remaining individuals and entities (those connected with Iran’s ballistic missile activities, conventional arms transfers or the IRGC) remain subject to freezing provisions. In addition, Member States must continue to freeze funds, other financial assets and economic resources and deny provision of funds and financial services that are owned or controlled by the individuals and entities currently listed on the UN’s website (Resolution 2231 (2015) list) which is accessible via the following link:
Note: JCPOA is an international agreement on the nuclear program of Iran reached between Iran, the P5+1 (the five permanent members of the United Nations Security Council; China, France, Russia, United Kingdom and United States, plus Germany) and the European Union.
Through Resolutions 1718 (2006), 1874 (2009), 2087 (2013), 2094 (2013), 2270 (2016), 2321 (2016) and successive Resolutions, the UNSC imposed certain measures relating to the DPRK.
These measures include but are not limited to:
- a nuclear, ballistic missiles and other weapons of mass destruction programs-related embargo;
- a ban on the export of luxury goods to the DPRK;
- individual targeted sanctions – namely, a travel ban and/or an assets freeze on designated persons, as well as on any individuals or entities acting on behalf of such designated persons;
- a ban on the provision of financial services or the transfer of financial or other assets, including bulk cash and gold, the opening of banking subsidiaries, the provision of public financial support, new commitments for grants, and financial assistance or concessional loans, that could contribute to prohibited programs or activities, or to the evasion of sanctions;
- prohibition of public and private financial support for trade with the DPRK, including granting of export credits, guarantees or insurance to their nationals, or entities involved in such trade; and
- prohibition from owning, leasing, operating, or providing vessel classification, certification or associated service and insurance, to any DPRK-flagged, owned, controlled or operated vessel.
The consolidated list of individuals or entities designated for proliferation of WMD relating to the DPRK is available on the UN’s website, which is accessible via the following link::
Domestically, the implementation of targeted financial sanctions relating to proliferation of WMD pursuant to any UNSC Resolutions against Iran and DPRK are enforceable via the Strategic Trade (United Nations Security Council Resolutions) Regulations 2010 which requires, among others, that the following measures shall be taken in relation to the individuals and entities designated under the Strategic Trade (Restricted End-Users and Prohibited End-Users) Order 2010:
- The freezing of the funds and other financial assets or economic resources of such countries or persons that are located in Malaysia; and
- The prevention of the provision of financial services, including insurance or re-insurance, or the transfer to, through, or from Malaysia, or to or by Malaysian nationals or entities organized under Malaysian law (including branches abroad), or persons or financial institutions in Malaysia, of any financial or other assets or resources if there is information that provides reasonable grounds to believe that such services, assets or resources could contribute to any restricted activity in any designated country.
The Strategic Trade (Restricted End-Users and Prohibited End-Users) Order 2010 was amended on 20 June 2016 to provide automatic reference to the list of individuals and entities in the website maintained by the Security Council Committee established pursuant to UNSCRs on both Iran (2231) and DPRK (1718). This will also give effect to obligations under the Strategic Trade (United Nations Security Council Resolutions) Regulations 2010. The Order comes into effect on 21 June 2016.
In order to facilitate reporting institutions’ understanding and compliance with the targeted financial sanctions on proliferation financing (TFS-PF) obligations and restrictions under the Strategic Trade Act 2010 (STA) and its subsidiary legislations, a Directive was issued by the Ministry of International Trade and Industry to provide more detailed requirements in relation to TFS-PF measures, which includes regulatory expectations pertaining to PF sanction screening and asset freezing compliance, maintenance of frozen funds, reporting requirements and other relevant information that all reporting institutions are required to adhere to.
The Directive is issued pursuant to Section 6 of the STA and came into effect on 13 April 2018.
The Order, Directive and relevant Circulars can be found HERE. (New Update)