Washington, Sep 6 — Billions of dollars connected to Iran are passing through accounts at American banks each year despite sweeping US sanctions intended to isolate Tehran from the global financial system, according to a media investigation published on Sunday.
Iran gains indirect access to dollar-clearing accounts through foreign banks with relationships with American financial institutions, The Wall Street Journal reported, citing Western officials, researchers and banking records.
The transactions use correspondent banking, a system through which banks process cross-border payments for financial institutions that do not have a direct presence in the United States, the financial daily reported.
Iranian entities reportedly conceal their involvement through front companies, currency exchanges and business partners in China, the United Arab Emirates and other jurisdictions. Foreign institutions then send dollar-denominated transactions through their US banking partners without identifying the Iranian connection.
The US Treasury Department identified approximately $9 billion in Iranian-linked funds that moved through American banks during 2024, the newspaper reported.
The findings raise questions about enforcement gaps in the US-led sanctions system as President Donald Trump's administration intensifies its military and economic pressure on Tehran, The Wall Street Journal said.
On August 28, the Treasury Department proposed cutting off the UAE branch of Egypt's state-owned Banque Misr from US correspondent banking services. The department classified Banque Misr UAE as a financial institution of "primary money laundering concern".
US officials said the branch had routed as much as $1.8 billion through American correspondent accounts for companies potentially connected to Iranian shadow-banking networks.
Treasury said Banque Misr UAE maintained dollar accounts with three American banks but did not identify them.
Banque Misr's website lists JPMorgan Chase and Citigroup among institutions with which it has correspondent relationships. Both banks declined to comment to the newspaper.
Egypt's Foreign Ministry said it was communicating with US officials about the allegations.
Banque Misr said it was engaging with the US Treasury Department and respected applicable regulatory and legal requirements. It added that its UAE branches continued operating normally.
The Treasury action was taken under 'Operation Economic Outcast', the Trump administration's campaign to sever Iran's access to international financial networks and impose consequences on foreign institutions facilitating sanctions evasion.
"We also warned that Iran's enablers cannot continue to enjoy access to the US dollar and the global financial system," Treasury Secretary Scott Bessent said while announcing the action against Banque Misr UAE.
American banks say they work closely with the Treasury Department to enforce sanctions and file legally required reports when transactions appear suspicious or potentially connected to Iran.
Elaine Dezenski, a former Department of Homeland Security official, said detecting the networks was difficult but possible.
"US and correspondent banks are squarely on the hook, and that pressure is only increasing," she told the newspaper.
The Treasury has issued warnings to financial institutions about indicators of Iranian sanctions evasion.
According to the daily, these include companies with unclear ownership structures, businesses registered in Hong Kong but using Chinese bank accounts and UAE-based entities with little visible commercial activity.
Iran has increasingly used the Chinese yuan and cryptocurrencies to reduce its reliance on the dollar. It still requires access to dollar transactions for some international trade, technology purchases and the acquisition of components that Washington says may support its military programmes.
US sanctions generally prohibit American individuals and institutions from conducting transactions involving designated Iranian entities.
Washington has also threatened foreign banks and companies with exclusion from the US financial system if they knowingly help Tehran evade those restrictions.