Despite US sanctions against Iran, billions of dollars linked to Tehran pass each year through correspondent accounts at American banks. The Wall Street Journal reports.
According to Western officials and researchers, Iran is gaining access to the US financial system through foreign banks that maintain correspondent relationships with US banks.
Last year, the US Treasury Department said it had identified about $9bn in Iranian funds that passed through American banks in 2024.
Iran uses an extensive network of shell companies, currency-exchange outlets and other intermediaries to conceal links to Tehran. Such structures operate, among other places, through China, the UAE, Hong Kong and Dubai.
They typically do not open accounts directly with American banks. Instead, they use foreign financial institutions that have access to US correspondent accounts. Transactions are processed through them on behalf of Iranian companies without disclosing their connection to Tehran.
The administration of US President Donald Trump has urged American banks to tighten oversight of such transactions. Washington has also warned foreign banks that carry out dollar transactions with Iran via US correspondent accounts of possible consequences.
"Under President Trump, the US Treasury Department has made it clear that compliance with US sanctions and other legal obligations is not voluntary, and failure to comply will have consequences. Financial institutions have been warned," said US Treasury official Gene Lang.
At the same time, American banks say they are working with the US Treasury Department and meeting sanctions-compliance requirements, including by reporting suspicious transactions.
Experts note that excessive tightening of controls could also have negative consequences. In particular, strict restrictions for American and foreign banks could encourage countries to switch to alternative financial systems and currencies, including the Chinese yuan.
At the same time, Iran is increasingly using the yuan and cryptocurrency to circumvent US financial controls. However, the dollar remains necessary for part of the country’s foreign trade, for supporting allies in the Middle East, and for purchasing sanctioned technologies and components.
According to the WSJ, the correspondent banking system remains one of the key channels through which Iranian funds can enter the global financial system despite US sanctions.
The newspaper previously reported that after six months of war with the US, Iran had become more confident in its ability to continue the conflict. According to US intelligence assessments, Tehran can count on a prolonged confrontation and will try to wear Washington down.
Iran also, according to the newspaper, has a clearer understanding of its ability to control the Strait of Hormuz, through which, before the war, roughly a fifth of the world’s oil supplies passed.