The U.S. effort to put Iran in a financial vice was working. European banks were paying big fines and closing off its money flows, and severe sanctions on the country’s banking and energy sectors were forcing it to the table on a nuclear deal. But as U.S. enforcement officials would soon discover, Iran had found a new channel for its illicit transactions: Asia.
Lenders in South Korea, Taiwan and elsewhere in the region may have played a part, knowingly or otherwise, in helping Iran evade trade sanctions before the nuclear deal and turn some of its oil proceeds into U.S. dollars, according to court testimony, legal filings and people familiar with the matter.
Now that U.S. enforcers have extracted billions of dollars from European banks over sanctions violations, their focus is turning to Asian banks, according to several former U.S. Treasury Department officials who specialize in sanctions work.
“The regulatory gaze and enforcement attention is facing east,” said Juan Zarate, a former Treasury Department and White House official who co-founded the Financial Integrity Network, a consulting group that specializes in preventing illicit financial activities. Many Asian banks “haven’t been leading the pack in terms of financial risk management,” he said.
Read the full article in Bloomberg Politics.