US Treasury bans correspondent accounts with Iranian banks

Chris Hamblin

29 October 2019

Institutions in the United States are therefore no longer allowed to open or maintain correspondent accounts for their Iranian counterparts or use foreign financial institutions’ correspondent accounts to process transactions involving Iranian financial institutions.

The Act, which is codified at 31 USC 5318A(b)(5) and whose full name is the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act, allows the Secretary of the Treasury (or, in this case, one of his bureaux) to require US financial institutions to take certain special measures against "entities of primary money laundering concern." These can cover:

recordkeeping and the reporting of certain transactions;
the collection of information relating to beneficial ownership;
the collection of information relating to certain payable-through accounts;
the collection of information relating to certain correspondent accounts; and
prohibitions against the opening or maintaining of correspondent or payable-through accounts, this being the operative one in this case.

These various bans are still in force against ABLV Bank, Banca Privada d'Andorra, Banco Delta Asia, the Bank of Dandong and the Commercial Bank of Syria. The Treasury has also taken this kind of action against three jurisdictions: the Ukraine (revoked 2003); Nauru (revoked 2008); and Burma (for which some 'exemptive relief' was granted by the Obama Administration).

Last month the Treasury sanctioned ('designated') the Central Bank of Iran.

In August FinCEN opened its Global Investigations Division (GID), whose responsibility it is to pursue investigative strategies against foreign money laundering schemes in accordance with the Bank Secrecy Act 1970. Much of its resources are drawn from FinCEN's old Office of Special Measures, which was a part of the Enforcement Division. Its chief is Matthew Stiglitz, a veteran prosecutor.