The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has proposed a rule to cut off MBaer Merchant Bank AG (MBaer) from the U.S. financial system. The move comes after findings that MBaer provided financial support to illicit actors associated with Iran and Russia.
If enacted, the proposed rule would prevent U.S. financial institutions from opening or maintaining correspondent accounts for MBaer. This action is intended to address concerns about money laundering and other illegal activities linked to the bank.
“MBaer has funneled over a hundred million dollars through the U.S. financial system on behalf of illicit actors tied to Iran and Russia,” said Secretary of the Treasury Scott Bessent. “Banks should be on notice that the U.S. Treasury will aggressively protect the integrity of the U.S. financial system using the full force of our authorities.”
According to Treasury officials, MBaer and its employees have been involved in enabling money laundering and other illicit finance activities since its founding. These include facilitating corruption connected to Russian money laundering, as well as supporting terrorist financing for Iran-aligned groups such as the Islamic Revolutionary Guard Corps and its Quds Force.
Authorities describe MBaer as an important channel for various illicit actors seeking access to U.S. dollars, which they say poses risks to national security and undermines trust in the American financial system.
Under section 311 of the USA PATRIOT Act, FinCEN can impose special measures if it determines that a foreign financial institution presents a primary money laundering concern. The notice of proposed rulemaking published today proposes “special measure five,” which would prohibit domestic institutions from doing business with MBaer in this capacity. Public comments on this proposal are open for 30 days following publication in the Federal Register.
FinCEN also operates a whistleblower program for violations related to the Bank Secrecy Act, sanctions, and national security laws. Individuals who provide actionable information leading to enforcement actions may qualify for awards under this program. More details are available at https://www.fincen.gov/whistleblower-program.
