On 30 January 2020, the Swiss Federal Council announced the first successful pilot transaction under the proposed Swiss Humanitarian Trade Arrangement (SHTA), a payment mechanism designed to enable the delivery of humanitarian goods to Iran. The SHTA was developed by Switzerland since autumn 2018 with the cooperation of relevant US and Iranian authorities, along with selected Swiss and interested banks. Once finally agreed and implemented, it will become the first US OFAC-consented humanitarian trade arrangement, and will reduce the cost and difficulty for Swiss exporters that supply humanitarian goods to Iran to receive payment for the humanitarian items provided.
Since the US withdrawal from the JCPOA, the US Government has repeatedly tightened restrictions on individuals and entities engaged in Iran-related dealings. While there remain certain exemptions/authorizations for humanitarian-related transactions, including for US and non-US Persons involved in the sale of certain food items, medicines, and basic medical supplies, recent changes in the US legal framework have made it increasingly difficult for parties to receive payment even for such transactions.
Amidst a growing lack of clarity regarding which transactions would qualify as humanitarian transactions, the aim of the 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 are guaranteed. Under the SHTA, participating banks and exporters will be given assurances by the US Treasury Department that the financial transactions can be processed in accordance with US law, subject to their providing SECO with detailed information about the transactions, their business activities and their business partners in Iran. Increased due diligence will have to be exercised on these transactions, and the information will be verified by SECO and shared with the US Treasury Department.