U.S. moves to cut off Swiss bank over alleged Iran and Russia flows

The U.S. Treasury proposed a regulation Thursday that would cut off MBaer Merchant Bank AG from the U.S. financial system, citing alleged illicit money flows tied to Iran and Russia.

The change would target the Swiss bank for what the Treasury described as enabling access to U.S. dollars for “a wide variety of illicit actors,” according to a Treasury readout of the proposal described by the Associated Press. The proposal comes as officials from the United States and Iran conduct indirect talks in Geneva focused on Tehran’s nuclear negotiations.

Treasury’s Financial Crimes Enforcement Network proposed the federal regulation Thursday, the AP reported, saying that if finalized it would prohibit U.S. institutions from doing business with MBaer Merchant Bank AG. Treasury tied the move to concerns about national security and the integrity of the U.S. financial system, linking the bank’s role in dollar transactions to alleged illicit activity.

In its description of MBaer’s function, Treasury said the bank “is a critical access node to the U.S. dollar for a wide variety of illicit actors,” according to the AP’s report. Treasury said those alleged risks undermine financial-system integrity and put U.S. national security at risk.

Treasury also alleged that since MBaer’s inception, the bank has enabled money laundering and facilitated corruption and terrorist financing, including for Russian criminals and for Iran’s Islamic Revolutionary Guard Corps, according to the AP report. The AP said Treasury accused MBaer of funneling over $100 million through the U.S. financial system on behalf of criminals out of Iran and Russia.

The AP reported that MBaer was founded in 2018 and that it is both small and new as a bank, making the Treasury move notable. A banking profile from 2020 cited by the AP showed MBaer had roughly $245 million in assets, placing it as the 200th largest bank in Switzerland, according to the report.

Treasury Secretary Scott Bessent said 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,” the AP reported. The report said a spokesperson for the bank was not immediately available for comment.

The proposed rule is part of broader U.S. sanctions efforts described in the AP report, which said the Trump administration has imposed multiple tranches of sanctions on people and companies accused of enabling Iran’s government, ballistic missile programs, drone production, and illicit oil sales. The sanctions pressure has been paired with the U.S. push for Iran to reach a deal on its nuclear program, the AP report said.

The AP report placed the Treasury action alongside diplomacy taking place Thursday in Geneva, where the U.S. side is holding indirect talks with Iranian negotiators via mediator Oman. The report said U.S. envoy Steve Witkoff is among those involved in the talks, which the AP described as connected to Tehran’s nuclear negotiations.