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US Warns Foreign Banks to Cut Iran Ties Immediately
- •The US Treasury Department warned foreign financial institutions to sever ties with Iran or face immediate sanctions without advance notice.
- •Foreign banks facilitating Iran's access to the global financial system or providing services to Iranian banks are at high risk of penalties.
- •Penalties could include restrictions on maintaining US correspondent or payable-through accounts, severely limiting international banking access.
- •The warning highlights the extraterritorial reach of US sanctions, impacting foreign banks even for transactions outside the United States.
- •The move is part of Washington's intensified effort to increase financial pressure on Iran amid the ongoing conflict.
Key Questions Answered
The US Treasury Department warned foreign financial institutions that continue doing business with Iran or its sanctioned financial sector that they could face sanctions without advance notification. It urged them to immediately terminate any activities or relationships exposing them to US penalties.
Measures may include restrictions on opening or maintaining US correspondent or payable-through accounts, which significantly limit a bank's ability to execute transactions through the US financial system and access dollar-based international channels. Furthermore, civil and criminal enforcement penalties could apply if these transactions breach US sanctions.
The war began on February 28 after the US and Israel attacked Iran, which was followed by Iranian strikes against Israel and Gulf states hosting US military bases.
