U.S. Treasury proposes severing a Swiss bank from the U.S. financial system over Iran and Russia links

By Steve Goldstein

The Treasury is proposing to sever the Swiss bank MBaer from the U.S. financial system.

The U.S. Treasury Department on Thursday said it's proposing to sever a Swiss bank from the U.S. financial system over alleged illicit ties to Russia and Iran.

Treasury Secretary Scott Bessent said MBaer Merchant Bank, based in Zurich, has funneled over $100 million through the U.S. financial system on behalf of illicit actors tied to Iran and Russia.

If the Treasury proposal is finalized, U.S. financial institutions will be barred from opening or maintaining a correspondent account for MBaer.

"Since its inception, MBaer and its employees have enabled money laundering and illicit finance activities, including by facilitating corruption linked to Russian money laundering and money laundering and terrorist financing on behalf of Iran-aligned foreign terrorist organizations, including the Islamic Revolutionary Guard Corps and its Quds Force," said the Treasury in a statement.

The move comes with the U.S. involved in direct negotiations with Iran, and also as it has held talks with Russia aimed at ending that country's four-year-old full-scale invasion of Ukraine.

MBaer was founded in 2018 by Michael Baer, the great-grandson of Julius Baer, who founded that eponymous bank. Michael Baer left Julius Baer (CH:BAER), the bank, in 2015.

MBaer, which didn't immediately respond to a request for comment, says it's owned by Swiss, Middle Eastern and Asian investors.

Switzerland's financial regulator, the Financial Market Supervisory Authority, says it's in contact with the U.S. regulator and had three weeks ago brought its own enforcement action against the bank over anti-money-laundering rules and risk management in the area of sanctions, which is being appealed by the bank.

-Steve Goldstein

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02-26-26 1012ET