The US effort to put Iran in a financial bind meant European banks were paying big fines and closing off its money flows amid severe sanctions on the country’s banking and energy sectors. But as US enforcement officials would soon discover, Iran had found a new channel for its 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 US dollars, according to court testimony, legal filings and people familiar with the matter, Bloomberg reported.
Now that US enforcers have extracted billions of dollars from European banks over sanctions violations, their focus is turning to Asian banks, according to several former US 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.
Many Asian banks “haven’t been leading the pack in terms of financial risk management”, he said.
The shift underscores how difficult it can be to enforce international sanctions. When one door is closed, another one inevitably opens.
Read the full article in the Financial Tribune.