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Treasury Targets Iranian Financial Institutions Over Money Laundering Concerns

Washington D.C. - The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued a final rule prohibiting the opening or maintaining of correspondent accounts in the United States for or on behalf of Iranian financial institutions, citing concerns over money laundering and terrorist financing.

The move is part of ongoing efforts to combat the financing of terrorism and proliferation activities by Iran, which has been designated as a foreign jurisdiction of primary money laundering concern. FinCEN’s decision builds on the Treasury’s Office of Foreign Assets Control (OFAC) designation of the Central Bank of Iran under its counterterrorism authority.

“We are taking action to protect international financial institutions from the wide range of illicit finance risks emanating from this jurisdiction,” said FinCEN Director Kenneth A. Blanco. “Iran’s regime has a long history of supporting terrorist groups and engaging in deceptive financial practices, and we will continue to take steps to disrupt these activities.”

The rule also prohibits foreign financial institutions’ correspondent accounts at covered U.S. financial institutions from processing transactions involving Iranian financial institutions. The move is aimed at preventing the improper indirect use of U.S. financial institutions by Iranian banking institutions.

Background

The Iranian regime has been identified as a major sponsor of terrorism and has a history of engaging in deceptive financial practices. The country’s largest ballistic missile program in the Middle East is a major challenge to non-proliferation efforts in the region.

FinCEN’s action is part of ongoing efforts to disrupt Iran’s ability to finance its military activities and support terrorist groups. The Treasury Department will continue to work with international partners to address money laundering and terrorist financing concerns related to Iran.

Resources

For more information, visit OFAC’s website for details on the humanitarian mechanism and FinCEN’s final rule related to Iranian financial institutions.