Iran is moving billions of dollars a year through the American banking system, giving Tehran a route to launder money and evade sanctions on a large scale, according to a Wall Street Journal investigation published overnight. Western officials and investigators at financial institutions told the paper that Iranian funds pass through clearing accounts at US banks every year, despite sanctions that bar almost anyone subject to US law from most financial activity connected to Iran.
The route runs through correspondent banking, a system more than a century old in which foreign banks hold accounts at American institutions in order to move dollars. Iran reaches those accounts through foreign partners that maintain relationships with US banks. The arrangement is what stitches the global financial system together, and it also gives Tehran multiple quiet ways into it.
Detection is difficult because Iran routes the money through layered networks of shell companies and other concealment methods. The Trump administration has been pressing American banks to tighten scrutiny of transactions that may be linked to Iran, and has put foreign banks that clear dollar payments for Tehran on notice.
The clearest illustration came on August 28, when the Treasury Department identified the United Arab Emirates arm of Egypt's state-owned Banque Misr as one of the institutions helping Iran reach the US banking system. Treasury's Financial Crimes Enforcement Network proposed a rule under Section 311 of the USA PATRIOT Act that would designate Banque Misr UAE a primary money laundering concern and bar American banks from maintaining correspondent accounts for it.
Treasury estimates that between January 2024 and June 2026, the bank's UAE branches processed roughly $1.8 billion for 103 companies potentially tied to Iranian shadow banking networks, and describes the operation as a critical node in the Iranian regime's access to US dollars. Among the companies were apparent front entities linked to Iran's Defense Ministry and the Islamic Revolutionary Guard Corps.
Banque Misr UAE held dollar correspondent accounts with three American banks, according to Treasury, which did not name them. The bank's own website lists JPMorgan Chase and Citigroup among its correspondent institutions. Both declined to comment on the Treasury action.
Egypt's Foreign Ministry said it is in contact with US authorities over the allegations. Banque Misr said it is engaging with the Treasury Department and complies with applicable regulatory and legal frameworks, and that its UAE branches are operating normally.
The measure is part of Operation Economic Outcast, the administration's pressure campaign aimed at tightening the economic squeeze on Tehran and forcing concessions to bring the hostilities to a close. Treasury Secretary Scott Bessent said in a statement that the department had "promised to sever every economic lifeline Tehran has left". Washington has warned foreign governments to cut ties with Iran or face secondary sanctions, up to being locked out of the dollar system entirely.
The scale of the problem was set out in earlier WSJ reporting on August 20, which found that companies based in the UAE received 62 percent of some $9 billion in suspected Iranian illicit flows moving through US correspondent accounts in 2024 alone.
The Banque Misr measure is a proposed rule rather than a completed action, and is subject to a 30-day public comment period before it can take effect.
