WASHINGTON: The Treasury Department is seeking to cut a small Swiss bank from the US financial system, over its dealings with “illicit actors” linked to Russia and Iran, according to a rule proposed. If the rule is finalized, it would bar covered US financial institutions from opening or maintaining a correspondent account for Zurich-based MBaer Merchant Bank. “MBaer has funneled over a hundred million dollars through the US financial system on behalf of illicit actors tied to Iran and Russia,” said Treasury Secretary Scott Bessent in a statement.
“Banks should be on notice that the US Treasury will aggressively protect the integrity of the US financial system using the full force of our authorities,” he said.
The Treasury charged that MBaer and its staff have enabled Russian money laundering as well as financing of terrorist activity, including that of the Islamic Revolutionary Guard Corps and its Quds Force. The proposed rule described MBaer as “a small, private Swiss financial institution with a single office headquartered in Zurich.”
The Treasury’s Financial Crimes Enforcement Network (FinCEN) also assessed that MBaer has processed transactions linked to Venezuelan corruption. According to MBaer’s website, the Swiss Financial Market Supervisory Authority FINMA granted it a banking license in December 2018. MBaer said it has taken note of the US Treasury’s announcement and will comment after consulting with its lawyers.
In a separate statement Thursday, FINMA added that it concluded enforcement proceedings against MBaer three weeks ago over “anti-money laundering rules and risk management in the area of sanctions,” among other issues. “The ruling is not yet legally binding; an appeal submitted by the bank is pending before the Swiss Federal Administrative Court,” FINMA said.
It added that it is in contact with the bank and US authorities. MBaer is majority-owned by Swiss investors, with other shareholders based in Asia and the Middle East, the bank’s website said. Written comments on the Treasury’s proposed rule may be submitted within 30 days of its publication. — AFP