The U.S. Department of Treasury's Office of Foreign Assets Control (OFAC) amended the Iranian
Transactions Regulations, 31 C.F.R. part 560 (the ITR), effective November 10, 2008, by
revoking an authorization previously granted to U.S. depository institutions to process "U-turn"
transfers - PDF (PDF Help), and making certain other conforming and technical changes.
A "U-turn" transfer is initiated offshore as a dollar-denominated transaction by order of a foreign
bank's customer. The transaction then becomes a transfer from a correspondent account held by
a domestic bank for the foreign bank to a correspondent account held by a domestic bank for
another foreign bank. The transaction eventually ends up offshore as a transfer to a dollar-
denominated account of the second foreign bank's customer.
As a result of this amendment, U.S. depository institutions no longer will be allowed to process
"U-turn" transfers involving Iran, thereby precluding transfers that dollarize transactions through
the U.S. financial system for the benefit of Iranian banks or other persons in Iran or the
Government of Iran. This amendment does not revoke the existing authorization in the ITR for
funds transfers by U.S. depository institutions, through intermediary third-country banks , to or
from Iran or for the benefit of the Government of Iran or a person in Iran arising from underlying
transactions authorized by a specific or general license issued pursuant to the ITR (e.g.,
payments arising from authorized sales of agricultural products, medicine, and medical devices to
Iran), are not prohibited by the ITR. 1
1 1. (e.g., a family remittance not related to a family-owned enterprise)
2. (e.g., payment for the shipment of a donation of articles to relieve human suffering; the
exportation or importation of information and informational materials; or travel-related