Iranian Shadow Banking Nets $9 Billion Through US Correspondent Accounts

About $9 billion in suspected Iranian shadow-banking activity flowed through U.S. correspondent accounts in 2024, despite years of sanctions aimed at restricting Iran's access to dollars.

The transactions were identified by the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) in reports submitted by U.S. financial institutions.

Foreign shell companies accounted for about $5 billion of the activity, while dozens of foreign oil companies that appeared to be Iranian front companies handled roughly $4 billion, FinCEN said in an analysis of activity in 2024.

Iranian entities do not necessarily need accounts directly at U.S. banks to access the dollar system. Foreign financial institutions maintain correspondent accounts with U.S. banks to settle international transactions, allowing funds to pass through the American banking system even when the underlying parties are based elsewhere.