Iran is still able to transfer billions of dollars’ worth of funds each year through accounts linked to US banks, despite sanctions imposed by the US government to completely cut the country off from the global financial system, a report has shown. 

The Saturday report by The Wall Street Journal (WSJ) said Iran uses foreign institutions with correspondent-banking relationships with US banks to gain indirect access to the US financial system. 

The report claimed that foreign banks with branches in countries like the United Arab Emirates (UAE) and Hong Kong normally use a network of front companies and currency exchanges that are related to Iran to settle accounts at US banks. 

It said such banking operations are substantial in scale and size, with the US Treasury identifying some $9 billion in Iranian funds that passed through US banks in 2024. 

The report comes as Washington is struggling to pile up more economic pressure on Iran as part of the newly announced Operation Economic Outcast to force the country into political and military concessions. 

The Treasury announced late last month that it had imposed restrictions on the access of the UAE branch of Egypt’s state-owned Banque Misr to correspondent accounts at US banks, claiming the bank had processed as much as $1.8 billion for companies potentially connected to Iranian shadow-banking networks. 

However, the WSJ report said increased US pressure on foreign banks and financial institutions to strengthen their scrutiny of transactions that could involve Iran could backfire. 

It said such aggressive restrictions on correspondent banking could mean more obstacles for legitimate international payments, forcing customers to switch to alternatives to the dollar. 

Iran has increasingly reduced its reliance on the dollar for trade over the past years, although the country still needs the currency for some of its international transactions.