U.S. Eyes Sanctions on Swiss Bank Over Iran, Russia Links

Alanbatnews -

The U.S. Treasury Department has proposed severing Swiss-based Bank EFG from the U.S. financial system, alleging the institution provided support to illicit actors linked to Iran, Russia, and Venezuela.

The Treasury Department's action, while rare, underscores Washington's determination to shield its financial infrastructure from those who facilitate transactions for sanctioned entities and individuals.

If finalized, the decision would prohibit U.S. financial institutions from opening or maintaining correspondent accounts for the Zurich-based bank.

The U.S. Treasury Department said Bank EFG and its employees facilitated corrupt operations related to Russian and Venezuelan money laundering, as well as money laundering and terrorist financing for the Iranian Revolutionary Guard Corps and its Quds Force, which are subject to U.S. sanctions.

“Bank EFG moved more than $100 million through the U.S. financial system on behalf of illicit actors tied to Iran and Russia,” said U.S. Treasury Secretary, Scott P. Bisent, in a statement. “Banks must recognize that the Treasury Department will vigorously protect the integrity of the U.S. financial system by using its full authority.”

The Swiss Financial Market Supervisory Authority (FINMA) acknowledged the U.S. Treasury's statement, clarifying that it is “not yet legally binding and that the bank’s appeal is still pending before the Swiss Federal Administrative Court.”

Bank EFG has stated its full commitment to cooperating with Swiss authorities and supporting the work of the internal auditor appointed to the bank. The Swiss bank added that it maintains a strong capital and liquidity base and continues its commercial activities.

Michael Levi, a global anti-money laundering expert at Cardiff University, told Reuters that the U.S. announcement is a “strategic signal not to help enemies of the United States.” He added that the small size of Bank EFG means that there would be no major potential repercussions if sanctions were imposed on it.

The U.S. holds significant regulatory power globally, largely due to its ability to restrict any bank's access to the dollar, a cornerstone of international finance.

The last European bank to face similar U.S. sanctions was Latvia’s ABLV Bank, which was closed in 2018 after Washington accused it of money laundering and violating U.S. sanctions.

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) published a notice regarding the proposed sanctions against the Swiss bank, inviting written comments within 30 days on the proposal to disconnect Bank EFG from the U.S. financial system.

Bank EFG's website indicates that it is primarily owned by Swiss investors, with additional shareholders from Asia and the Middle East. Michael Baer founded Bank EFG in 2018.