The US Treasury Department has called on private banks to step up their scrutiny of financial networks that enable Iran to bypass international trade restrictions and launder proceeds from sanctioned oil sales. The move, announced on Monday, is the latest salvo in Washington's campaign to isolate Tehran economically and push it toward a nuclear agreement.
Under the new directive, US financial institutions are instructed to watch for red flags such as oil shipments labeled as 'Malaysian blend'—a designation that US authorities say is frequently used to disguise Iranian crude. Other indicators include missing or falsified shipping records and the use of ship-to-ship transfers in open waters, which are designed to obscure the cargo's origin.
The Treasury's Financial Crimes Enforcement Network (FinCEN) has identified dozens of maritime companies based in Iraq, the United Arab Emirates, and Hong Kong as participants in the transport of sanctioned Iranian oil. According to a report released Monday, these firms conducted transactions worth roughly $4 billion (€3.4 billion) linked to Iranian oil companies in 2024, with at least $707 million (€602 million) of those funds processed through US accounts.
'Economic Fury' and the push for a deal
The initiative is part of a broader US strategy dubbed 'Economic Fury', launched in April, which aims to apply 'maximum economic pressure' on the Iranian regime by systematically cutting off its primary revenue streams. US Treasury Secretary Scott Bessent reiterated the Trump administration's commitment to this approach and announced that twelve individuals and entities had been designated as facilitators of the Islamic Revolutionary Guard Corps' (IRGC) sale and shipment of Iranian oil.
The US has also sent formal warnings to financial institutions in China, Hong Kong, the UAE, and Oman, threatening secondary sanctions on any entity found to be facilitating Iranian business activities. These letters accused those jurisdictions of allowing illicit transactions to pass through their domestic banking systems with limited oversight.
For European banks, the implications are significant. Many operate globally and must navigate US sanctions regimes while maintaining compliance with EU regulations. The heightened US scrutiny could affect institutions like Commerzbank, which is already restructuring, or HSBC, which recently reported profit slips linked to Iran-related charges. The US Treasury's focus on shipping hubs in the UAE and Hong Kong also raises questions for European firms involved in maritime trade with those regions.
The broader context includes rising tensions in the Strait of Hormuz, where the US has warned of 'devastating' force against Iranian attacks on shipping. Meanwhile, a Malta-flagged tanker recently delivered Iranian crude to South Korea, highlighting the complex web of sanctions evasion.
The US Treasury's latest directive underscores the growing role of private financial institutions in enforcing international sanctions. As negotiations with Tehran stall, Washington is relying on banks to act as frontline monitors—a task that carries both legal obligations and reputational risks for lenders worldwide.
