US Treasury warns foreign financial institutions that continuing business with sanctioned Iranian banks could trigger sanctions and restrictions on access to the US financial system
The US Treasury Department has warned foreign financial institutions that continue doing business with Iran or its sanctioned financial sector that they could face sanctions without advance notice, as Washington moves to further restrict Tehran’s access to the global financial system.
In an alert, the Treasury said foreign financial institutions continuing to transact with sanctioned Iranian financial institutions could be targeted at any time. It urged such institutions to immediately terminate the activities and relationships that could expose them to US sanctions.
The warning comes as the United States seeks to tighten financial pressure on Iran during the ongoing war between Iran, the US and Israel.
Foreign banks face sanctions risk
The Treasury said foreign financial institutions that facilitate Iran’s access to the global financial system could face sanctions.
This includes institutions that provide financial services to Iranian banks, as well as their subsidiaries or branches operating in third countries.
Foreign institutions could also face penalties if Iran-related transactions result in US banks or other US persons violating Washington’s sanctions, the Treasury said.
The measures could include restrictions on opening or maintaining US correspondent or payable-through accounts for foreign financial institutions involved in sanctioned activities.
More from Business
Such restrictions can significantly limit a bank’s ability to conduct transactions through the US financial system and access dollar-based international banking channels.
US tightens pressure on Iran
Iran has already been under extensive US sanctions for years. Washington has, however, stepped up efforts in recent weeks to restrict Iran’s financial links with the rest of the world.
The US has warned countries and companies that continuing business with sanctioned Iranian entities could expose them to US penalties.
The latest Treasury alert expands that warning to foreign financial institutions that help Iranian banks or other sanctioned entities access international financial services.
The warning also underscores the reach of US sanctions beyond American companies. Foreign banks that conduct transactions involving sanctioned Iranian institutions can face consequences even when the transactions take place outside the United States.
What the Treasury warning means
The immediate focus is on foreign financial institutions that continue to maintain relationships or conduct transactions with sanctioned Iranian financial institutions.
The Treasury said such institutions should take immediate action to end the relevant activities and relationships rather than wait for advance notification from Washington.
The department also warned that civil and criminal enforcement penalties could apply if Iran-related transactions cause US financial institutions or US persons to breach sanctions.
The move comes as Washington seeks to further cut Iran’s financial lifelines amid the wider conflict. The war began on February 28 after the US and Israel attacked Iran, followed by Iranian strikes on Israel and Gulf states hosting US military bases, according to Reuters.
US and Israeli strikes in Iran and Israeli attacks in Lebanon have killed thousands and displaced millions, according to figures cited by Reuters from various sources.