Washington, September 6 (Daily Kiran) : A recent investigation by The Wall Street Journal has revealed that, despite stringent economic sanctions imposed by the United States, billions of dollars linked to Iran are processed through American banks each year. The report highlights how Iran has managed to indirectly access the U.S. financial system via foreign banks.
According to the findings, Iranian entities utilize correspondent banking arrangements, allowing foreign banks to conduct dollar transactions without a direct presence in the U.S. This enables them to navigate around the sanctions effectively. The investigation indicates that Iranian firms often resort to front companies, currency exchanges, and business partners in countries such as China and the United Arab Emirates to conceal their identities. These foreign banks then process transactions in dollars through their American counterparts without revealing the connection to Iran.
The U.S. Treasury Department identified approximately $9 billion in transactions linked to Iran that passed through American banks in 2024. This revelation comes at a time when the Trump administration is intensifying military and economic pressure on Iran, raising questions about the vulnerabilities within the U.S. sanctions framework.
On August 28, the Treasury proposed cutting off the UAE branch of Egypt’s state-owned Bank Misr from U.S. correspondent banking services, labeling it a “primary concern for money laundering.” U.S. officials allege that this branch facilitated nearly $1.8 billion in transfers for companies tied to Iran’s alleged shadow banking network through American correspondent accounts.
While the specific names of the three American banks holding the dollar accounts for Bank Misr’s UAE branch were not disclosed, the bank’s website lists JPMorgan Chase and Citigroup as its correspondent banking partners. Both banks declined to comment on the matter.
This action by the Treasury falls under Operation Economic Outcast, aimed at curtailing Iran’s access to international financial networks and targeting foreign financial institutions that assist in evading sanctions. Treasury Secretary Scott Bassett emphasized, “We have made it clear that institutions aiding Iran cannot maintain access to the U.S. dollar and the global financial system.”
Additionally, the Treasury has warned banks about indicators of Iran’s attempts to evade sanctions, including companies with opaque ownership, firms registered in Hong Kong using Chinese bank accounts, and companies in the UAE with unclear business activities.
The report also notes that Iran has increased its reliance on the Chinese yuan and cryptocurrencies to reduce dependency on the dollar. However, it still requires dollar-based transactions for international trade, technology procurement, and certain military programs.
Under U.S. law, American citizens and institutions are prohibited from engaging in financial transactions with sanctioned Iranian entities. Furthermore, the U.S. has cautioned foreign banks and companies that knowingly assisting Iran in evading sanctions could result in exclusion from the U.S. financial system.
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