FinCEN moves to cut off Swiss bank from US financial system over money laundering ties

The US Treasury’s Financial Crimes Enforcement Network has proposed a rule that would sever a foreign bank’s access to the American financial system, citing its role in facilitating money laundering for illicit networks spanning multiple sanctioned nations. The action, taken under Section 311 of the USA PATRIOT Act, represents one of the most aggressive tools available to US regulators: a formal designation as a “primary money laundering concern.”

Alongside the FinCEN proposal, the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned individuals and companies linked to Iran’s money laundering activities, targeting a sprawling shadow banking infrastructure that has used the UAE as a critical hub for moving funds on behalf of sanctioned entities.

What FinCEN’s proposal actually does

When FinCEN designates an institution as a primary money laundering concern, it can invoke “special measures” that essentially build a wall between that institution and the US dollar system. In this case, FinCEN is pursuing special measure five, which would prohibit US financial institutions from opening or maintaining correspondent accounts for the designated bank.

FinCEN’s notice explicitly states that no lesser measure would be sufficient to address the money laundering risks posed by the institution. The bank has been implicated in facilitating money laundering for illicit actors connected to Venezuela, Russia, and Iran.

Following the announcement, Swiss regulators initiated liquidation proceedings against the bank, and major correspondent banks reportedly ceased providing services to the institution.

Dubai’s shadow banking problem

OFAC’s parallel actions have zeroed in on UAE-based entities identified as conduits for substantial financial transactions involving sanctioned parties. Estimates suggest roughly $6.4 billion in potential shadow banking transactions have originated in Dubai, making the emirate a central node in the infrastructure that supports sanctioned economies’ access to global finance.

The compliance ripple effect

This pattern has played out repeatedly in the post-9/11 era. Section 311 designations against institutions like Banco Delta Asia in 2005 and FBME Bank in 2014 triggered de-risking waves that affected entire corridors of international finance.

As of late August 2026, no final determination on the banking prohibition had been issued, though the bank’s ongoing liquidation in Switzerland appears to have effectively addressed the immediate access concerns.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.