On 27 February 2020, the Swiss Humanitarian Trade Arrangement (SHTA), a payment mechanism designed to enable humanitarian goods to be delivered to Iran, came into effect. 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 only.
Following the US’s withdrawal from the JCPOA in May 2018, and the subsequent reintroduction of 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, only very few financial institutions have been willing to make any payments in connection with Iran.
SHTA has been developed in order to ensure that exporters and trading companies in the Swiss food, pharmaceutical and medical sectors can make the necessary exports to Iran. 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 applicable US legislation.
In return, exporters and banks participating in the SHTA must provide the Swiss State Secretariat for Economic Affairs (SECO) with detailed information about their business activities and business partners in Iran, and the transactions they carry out under the SHTA. 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 by the Swiss firms.
The implementation of the SHTA was approved by the Federal Council on 20 January (see our previous update here). An initial pilot payment for the shipment of medicines to Iran by Swiss pharmaceutical giant, Novartis, was authorized on 27 January 2020. The shipment consisted of cancer drugs and medication required for organ transplants.
