Payment mechanism for humanitarian supplies to Iran in effect
Bern, 27.02.2020 - The Swiss Humanitarian Trade Arrangement (SHTA), a payment mechanism to enable humanitarian goods to be delivered to Iran, came into effect on 27 February. The SHTA was developed by Switzerland in close cooperation with the relevant authorities in the USA and in Iran, as well as with selected Swiss banks and companies. The SHTA is available to Swiss firms in the food, pharmaceutical and medical sectors.
The aim of the Swiss Humanitarian Trade Arrangement (SHTA) is to ensure that exporters and trading companies in the food, pharmaceutical and medical sectors based in Switzerland have a secure payment channel with a Swiss bank through which payments for their exports to Iran are guaranteed. In this way, Switzerland is helping to supply the Iranian population with agricultural commodities, food, medicines and medical equipment. This is in keeping with Switzerland’s humanitarian tradition.
The SHTA was developed by Switzerland in close cooperation with the relevant authorities in the USA and Iran, as well as with selected Swiss banks and companies. Under the SHTA, the US Treasury Department will provide the banks involved with the necessary assurances that financial transactions can be processed in accordance with US legislation.
In return, exporters and banks participating in the SHTA will provide SECO with detailed information about their business activities and business partners in Iran, and the transactions they carry out. SECO will verify this information and, in cooperation with the US Treasury Department, ensure that increased due diligence has been exercised in respect of the transactions carried out. To this end, SECO will also make the information received from the banks and exporters available to the US Treasury Department.
SECO, together with the FDFA and the State Secretariat for International Financial Matters SIF, has been working intensively since the end of 2018 to implement such a humanitarian payment mechanism. The Federal Council approved the implementation of the SHTA in principle on 20 January.
As a pilot transaction, an initial payment for the shipment of medicines to Iran by a Swiss pharmaceutical company was authorised on 27 January 2020. The shipment consists of cancer drugs and medication required for organ transplants.
Since the USA withdrew from the nuclear agreement with Iran in May 2018 and reintroduced unilateral sanctions, it has become increasingly difficult for Swiss exporters to supply humanitarian goods to Iran, although such shipments are in principle not subject to US sanctions. Due to the legal risks associated with US sanctions, hardly any financial institutions were willing to make payments in connection with Iran. The few remaining payment channels were expensive, complex and not very reliable.
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Last modification 12.02.2020
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