Several company documents show that Chinese, Middle Eastern, and Western banks have provided banking services to Iran's sanctioned energy and industrial sectors, helped Tehran direct money toward its beleaguered economy and defy US pressure to restrict its nuclear program Through a network of proxy companies, exchange firms, and middlemen, Iran has bank accounts that collectively handle tens of billions of dollars annually in prohibited trade under US sanctions, according to Western diplomats, intelligence officials, company documents and bank statements.
A system for financing sanctions evading
The network was designed and implemented by the Iranian political leadership, which it realized early on. from 2011 that the country needs to create a sanctions-evading financing system to resist international pressure to curb its nuclear program, according to Iranian diplomats and officials. Bank data and company documents reviewed by The Wall Street Journal show that HSBC Holdings PLC and Standard Chartered PLC, two of the world's largest banks by assets, were among a large number of institutions that provided services to companies that handled illicit trade on behalf of According to the report, the US sanctions imposed under the Trump administration prevent international banks from managing the accounts of Iranian companies.
Violators risk a range of penalties under US, domestic and international anti-money laundering laws, including billions of dollars in fines and loss of access to dollars and the world's most important financial markets. These sanctions are intended, in part, to isolate Iran from the global reserve currencies vital for stable trade and economy.
However, transactions conducted through international banks provided crucial facilitation to the Iranian regime to facilitate evasion of financial pressure
They gave Iran time to boost its nuclear program even during the ongoing negotiations to revive the 2015 nuclear deal that imposed restrictions on Iran’s nuclear development in exchange for sanctions relief.
On Thursday, the Biden administration took a step toward increasing pressure on Iran by imposing sanctions on several companies in the Middle East and China that the Treasury Department said were front companies of the state-owned energy giant in Tehran. According to documents and Western officials, Iranian-controlled exchange bureaus outside the country have set up proxy companies and bank accounts for them. It is through these companies and their bank accounts that Iranian companies subject to sanctions sell their oil and other goods to foreign buyers, receiving dollars, euros and other foreign currencies. Iranian importers then use this money to pay for goods the country needs to keep the economy running. The Central Bank of Iran electronically settles these currency transactions between Iranian exporters and importers.
Western intelligence officials have no evidence that banks are complicit in allowing sanctioned Iranian transactions, but senior compliance officials in The banks said that companies registered outside Iran that secretly maintain bank accounts for Iranian companies could evade controls aimed at combating money laundering.