Counter-Terrorism Act 2008 Schedule 7 (UK)

Schedule 7 to the Counter-Terrorism Act 2008 authorises United Kingdom Treasury directions imposing financial restrictions in response to specified money-laundering, terrorist-financing and weapons-proliferation risks. Its directions operate through financial institutions. It is distinct from the port and border examination power in Schedule 7 to the Terrorism Act 2000. [1, paragraphs 1-4; 4]

Conditions and requirements

Paragraph 1 provides three alternative triggers: relevant FATF advice; Treasury's reasonable belief in terrorist-financing or money-laundering activity posing a significant risk to UK national interests; or a reasonable belief that specified weapons development, production or facilitation poses such a risk. The power is not exercisable in relation to an EEA state. A direction's actual trigger must be identified rather than inferred from the nationality of a counterparty. [1, paragraph 1]

Directions may address a particular covered financial institution, a class or the sector as a whole. They may concern specified persons, governments or classes connected with the country, including qualifying subsidiaries. Available requirements include enhanced customer due diligence, monitoring, reporting and restrictions on entering or continuing transactions or business relationships. Paragraph 9(6) requires proportionality to the relevant advice or risk. This mechanism can produce Financial exclusion through regulated intermediaries without adjudicating a foreign target's criminal guilt. [1, paragraphs 3-13; 3, paragraphs 4-6 and 19]

Duration and safeguards

A direction to a particular institution expires after one year from the day it is given; a general order expires after one year from the day it is made, unless revoked earlier. Variation does not restart those periods, although a further direction or order may be made. General orders restricting or ending business require approval by both Houses within 28 days, calculated subject to the statutory parliamentary recess exclusions. Other general orders use the negative procedure. Treasury may license specified acts exempt from a direction limiting or ending business, subject to the licence's scope, conditions and duration. [1, paragraphs 14-17]

Bank Mellat

The Financial Restrictions (Iran) Order 2009 was made on 9 October and took effect on 12 October 2009. It directed covered institutions to cease transactions and business relationships with Bank Mellat, Islamic Republic of Iran Shipping Lines and their branches. Its direction expired in October 2010. In Bank Mellat (No 2) on 19 June 2013, the Supreme Court allowed the bank's appeal and quashed the order. The majority's substantive reasoning found the bank's selection irrational and disproportionate; the procedural majority found that it should have had an opportunity to make representations before the order. The judicial divisions and the separate closed-material judgment in No 1 should not be conflated. [2, articles 1-4; 3, paragraphs 7-10, 19-27, 49-50 and 193-195]

As reviewed on 25 October 2026, the revised schedule remains available as a statutory authority. That does not establish frequent current use or the existence of a live direction against any particular target. Each claimed restriction requires its own instrument, duration, licence position and review history. The Bank Mellat decision illustrates that statutory power and parliamentary approval do not by themselves establish the lawfulness of an individual application. [1, current revision notice and paragraphs 14-17; 3, paragraphs 49-50 and 193-195]

Sources

1. United Kingdom, *Counter-Terrorism Act 2008*, Schedule 7, revised text, Act of 26 November 2008, paragraphs 1-17, reviewed 25 October 2026. The official revision notice records changes known to be in force by that date and warns of possible future commencements.
2. United Kingdom Treasury, *Financial Restrictions (Iran) Order 2009*, SI 2009/2725, as made, made 9 October 2009, effective 12 October 2009, articles 1-4.
3. Supreme Court of the United Kingdom, [Bank Mellat v HM Treasury (No 2) [2013] UKSC 39](https://supremecourt.uk/uploads/uksc_2011_0040_judgment_32e27b53c6.pdf), 19 June 2013, especially paragraphs 4-10, 19-27, 49-50 and 193-195. The linked volume also contains the separate No 1 judgment, [2013] UKSC 38.
4. United Kingdom, *Terrorism Act 2000*, Schedule 7, examination power, cited solely to distinguish the two schedules.