Jonah Redfern 
Billions of dollars tied to Iran have continued moving through the US banking system despite decades of sanctions designed to cut Tehran off from the dollar economy, the Wall Street Journal reported, a finding also flagged by Israel Hayom. Neither report names the banks involved, the total value, or the period covered — those details remain unconfirmed.
Under the International Emergency Economic Powers Act, the Treasury's Office of Foreign Assets Control ("OFAC") generally bars US banks from processing transactions that benefit Iran's government, its central bank, or parties on its sanctions list. Since Washington's 2018 exit from the nuclear deal, foreign banks that knowingly clear Iran-linked dollar payments also risk "secondary sanctions" that would cut them off from the US financial system themselves. Narrow exceptions, such as humanitarian trade, require a specific OFAC license.
For bank compliance teams, enhanced due diligence on beneficial ownership is generally the main defense against unknowingly processing Iran-linked funds. For banks clearing dollar payments from Europe, secondary-sanctions exposure can apply even without a US branch, depending on the transaction's nexus to US persons or systems.
Hypothesis: the reported gap weakens Washington's credibility as it presses European allies, including the UK, Germany and the EU, to hold firm on Iran sanctions. Supporting this: if billions can cross US banks undetected, sealing dollar clearing is harder than officials suggest, giving European counterparts grounds to question strict compliance demands placed on them. Against this: one reported gap does not prove the wider sanctions regime is failing, and OFAC may already be investigating the flagged transactions without public disclosure.
What to watch: whether OFAC discloses an enforcement action tied to the reported flows, whether Treasury responds publicly to the findings, and whether European regulators cite the episode the next time Washington presses them on Iran sanctions compliance.
