FinCEN Proposes Ban on MBaer Bank's U.S. Financial System Access
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has proposed a rule that, if finalized, would sever MBaer Merchant Bank AG’s access to the U.S. financial system. This action is attributed to MBaer’s alleged financial support for illicit actors linked to Russia and Iran.
If the proposed rule is finalized, covered U.S. financial institutions would be prohibited from opening or maintaining a correspondent account for, or on behalf of, MBaer.
Secretary of the Treasury Scott Bessent stated that MBaer has funneled over $100 million through the U.S. financial system for illicit actors tied to Iran and Russia. He emphasized that the U.S. Treasury aims to protect the integrity of the U.S. financial system.
Allegations of Illicit Finance Activities
FinCEN indicates that since its inception, MBaer and its employees have allegedly enabled money laundering and illicit finance activities. This includes facilitating corruption linked to Russian money laundering.
The agency also cites the provision of money laundering and terrorist financing on behalf of Iran-aligned foreign terrorist organizations, such as the Islamic Revolutionary Guard Corps and its Quds Force. FinCEN identified MBaer as a critical access node to the U.S. dollar for various illicit actors, posing a risk to U.S. national security and undermining the U.S. financial system’s integrity.
Legal Framework and Public Comment
Under section 311 of the USA PATRIOT Act, FinCEN may impose “special measures” upon finding that a financial institution operating outside the United States is of primary money laundering concern.
FinCEN has published a notice of proposed rulemaking (NPRM) outlining this finding and proposing to impose special measure five. This measure would specifically prohibit U.S. financial institutions from maintaining correspondent accounts for MBaer. Written comments on the NPRM may be submitted within 30 days of its publication.