US Warns Foreign Banks of Sanctions Over Continued Iran Dealings

WASHINGTON, UNITED STATES — WEB DESK: The United States has issued a fresh warning to foreign financial institutions over dealings with Iran, saying banks could face American sanctions without advance notice if they continue certain transactions involving Tehran and its financial sector.

The warning increases pressure on international banks and financial companies to reassess their exposure to Iranian institutions as Washington intensifies its economic campaign against Tehran.

Foreign financial institutions conducting transactions with sanctioned Iranian banks have been urged to terminate those relationships immediately.

Banks and other institutions that provide Iran’s financial system with access to the wider international financial network could also face US sanctions.

The warning extends to financial services involving sanctioned Iranian banks as well as their overseas branches and subsidiaries.

Foreign institutions could face additional legal risks if their transactions cause US financial institutions or American individuals to violate existing sanctions.

Those consequences could include civil or criminal enforcement under applicable US sanctions laws.

The latest warning forms part of Washington’s broader effort to isolate Iran financially and restrict the movement of funds through overseas banking networks.

The United States has expanded economic measures against Iran in recent months, targeting both Iranian entities and foreign networks accused of helping Tehran circumvent sanctions.

Washington intensified that campaign last week by targeting Iran’s automotive, railway, manufacturing and steel networks.

The October 1 measures also targeted foreign suppliers and financial structures linked to Iranian industries.

US authorities have increasingly focused on what they describe as sanctions-evasion networks that allow Iranian institutions to move money and maintain access to international markets.

A separate action targeted the A7 Network, which Washington alleges has been used to facilitate Iranian sanctions evasion through a Russia-linked shadow banking system.

The network has disputed US allegations concerning its activities.

Washington’s latest warning substantially raises compliance risks for international financial institutions maintaining relationships with sanctioned Iranian entities.

It also signals that banks should not assume they will receive an individual warning before US authorities impose restrictions.

The measures form part of a wider American campaign to restrict Iran’s access to foreign currency, banking services and international commercial networks.

Iran has repeatedly criticised US economic sanctions, arguing that Washington uses financial restrictions to exert political and economic pressure on the country.

The latest warning does not mean that every transaction involving Iran will automatically result in sanctions. The legal consequences depend on the entities, activities and sanctions authorities involved.

However, Washington’s message makes clear that foreign financial institutions maintaining prohibited relationships with sanctioned Iranian banks face an increased risk of enforcement.