U.S. Treasury Moves to Sever Swiss Bank MBaer's Access Over Alleged Illicit Finance Ties to Russia, Iran

FinCEN Proposes Sanctions Against Swiss Bank

The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) announced on February 26, 2026, a proposed rule that, if finalized, would sever MBaer Merchant Bank AG's access to the U.S. financial system. This significant action targets the Swiss bank for its alleged financial support to illicit actors with ties to Russia, Iran, and Venezuela.

The proposed rule, issued under Section 311 of the USA PATRIOT Act, designates MBaer as a 'primary money laundering concern.' It would prohibit U.S. financial institutions from opening or maintaining correspondent accounts for, or on behalf of, MBaer, effectively cutting off its access to the crucial U.S. dollar-based financial system.

Allegations of Illicit Financial Activities

FinCEN's notice of proposed rulemaking details extensive allegations against MBaer. According to the Treasury, the bank has 'funneled over a hundred million dollars through the U.S. financial system on behalf of illicit actors tied to Iran and Russia.' These activities reportedly include:

• Facilitating money laundering and illicit finance activities since its inception in 2018.
• Processing transactions related to Venezuelan corruption.
• Enabling Russian money laundering networks, including servicing sanctioned Russian oligarchs such as Sergey Kurchenko and Viktor Medvedchuk.
• Facilitating payments for companies implicated in the theft of Ukrainian grain and procuring equipment for Russia's military.
• Supporting money laundering and terrorist financing on behalf of Iran's Islamic Revolutionary Guard Corps (IRGC) and its Quds Force, both of which are sanctioned by the U.S.
• Processing over $37 million tied to an oil smuggling and money laundering scheme benefiting Iran's IRGC.

FinCEN further alleges that MBaer executives and employees were aware of, and in some cases complicit in, customers' money laundering activities, often utilizing shell companies to obscure the nature of transactions.

Impact and Regulatory Response

Treasury Secretary Scott Bessent emphasized the U.S. commitment to safeguarding the integrity of its financial system, stating, 'Banks should be on notice that the U.S. Treasury will aggressively protect the integrity of the U.S. financial system using the full force of our authorities.' This move is considered rare and represents one of the most powerful tools in U.S. sanctions enforcement, with the last similar action against a European bank being Latvia's ABLV in 2018.

In response to the announcement, MBaer stated it would seek counsel before commenting. Meanwhile, the Swiss Financial Market Supervisory Authority (FINMA) confirmed it had concluded its own enforcement proceedings against MBaer three weeks prior, concerning anti-money laundering rules and risk management in sanctions. However, the ruling is not yet legally binding due to an appeal by the bank before the Swiss Federal Administrative Court. FINMA has appointed an audit agent as a monitor at MBaer.

Next Steps

The proposed rule is now subject to a 30-day public comment period following its publication in the Federal Register. If finalized, the rule would require U.S. financial institutions to take steps to prevent indirect access to the U.S. financial system through foreign correspondent relationships.