Treasury Moves to Cut Off MBaer From US Financial System

The US Department of the Treasury has moved to sever Swiss lender MBaer Merchant Bank AG from the US financial system, citing its alleged role in facilitating illicit finance linked to Iran and Russia. In a notice of proposed rulemaking published on 26 February 2026, the Financial Crimes Enforcement Network (FinCEN) set out plans that would prohibit covered US financial institutions from opening or maintaining correspondent accounts for, or on behalf of, MBaer.

The proposed action is based on findings under section 311 of the USA PATRIOT Act, which empowers FinCEN to designate a foreign financial institution as a primary money laundering concern and to impose so called special measures. In this case, FinCEN has proposed special measure five, the most severe option, effectively cutting MBaer off from access to US dollar clearing and correspondent banking relationships.

According to the Treasury, MBaer has funnelled more than $100 million through the US financial system on behalf of illicit actors tied to Iran and Russia. The department alleges the bank has enabled money laundering, corruption linked to Russian networks and terrorist financing associated with Iran aligned foreign terrorist organisations, including the Islamic Revolutionary Guard Corps and its Quds Force.

Treasury Secretary Scott Bessent said the action demonstrates the department’s willingness to use the full force of its authorities to protect the integrity of the US financial system. He warned that financial institutions should take note of the risks of facilitating transactions connected to sanctioned or illicit actors.

If finalised, the rule would significantly curtail MBaer’s ability to operate internationally by restricting its access to US correspondent accounts, a critical gateway to the global dollar based financial system. The move underscores continued US focus on disrupting cross border money laundering and sanctions evasion networks linked to geopolitical adversaries.

FinCEN has opened a 30 day consultation period following publication of the notice in the Federal Register. During this time, stakeholders may submit written comments on the proposed designation and the imposition of special measure five.

Separately, FinCEN highlighted its whistleblower incentive programme under the Bank Secrecy Act and certain sanctions and national security laws. Individuals providing actionable information that leads to successful enforcement action may be eligible for financial awards, reinforcing the agency’s broader enforcement and intelligence gathering strategy.

Read the press release here.