Iran Channels Billions of Dollars Through US Banks, WSJ Reports
Iran bypasses sanctions by routing billions of dollars annually through US correspondent banking networks. The Donald Trump administration is cracking down on foreign institutions aiding Tehran's shadow banking system.
Iran manages to transfer billions of dollars annually through the US banking system, enabling large-scale money laundering and sanctions evasion, The Wall Street Journal (WSJ) reported on Sunday.
Western officials and financial investigators told the newspaper that billions of dollars in Iranian funds flow through clearing accounts in US banks each year, despite strict sanctions prohibiting anyone subject to US law from participating in financial activities linked to Tehran.
The Correspondent Banking Loophole
Iran accesses these accounts through foreign partners that maintain relationships with US banks. This is done via correspondent banking, a century-old system that connects the global financial network while providing Tehran with covert entry points.
The administration of President Donald Trump has recently put foreign banks processing dollar transactions with Iran through US correspondent accounts on high alert. Officials have also pressured US banks to increase scrutiny on Iran-related transactions.
However, detecting these transactions remains difficult because Iran utilizes a complex network of front companies and other deceptive measures to disguise them.
Action Against Egyptian Bank in UAE
On August 28, the US Department of the Treasury identified the UAE branch of Egypt's state-owned Banque Misr as one of the foreign institutions suspected of helping Iran access the US banking system, moving to cut it off.
Officials said the Banque Misr branch in the UAE accessed US accounts and routed up to $1.8 billion for companies that were potentially part of Iranian shadow banking networks.
The Treasury Department stated that Banque Misr UAE held US dollar accounts with three US banks but did not name them. Banque Misr lists JPMorgan Chase and Citigroup on its website as institutions where it holds accounts. Both US banks declined to comment on the Treasury's actions.
The Egyptian Foreign Ministry stated it is communicating with US authorities regarding the Treasury's allegations. Banque Misr said it is in contact with the Treasury Department and respects "relevant regulatory and legal frameworks," adding that its UAE branches continue to operate normally.
'Economic Outcast' Campaign
This latest enforcement action is part of the Trump administration's new "Economic Outcast" campaign, a broad pressure initiative aimed at squeezing Iran financially to force concessions and end hostilities in the Middle East.
Washington continues to warn global leaders to sever ties with Iran or face secondary sanctions, which carry the threat of being completely cut off from the US dollar financial system.
