The large number of information leaks, some of which are obviously intentional, indicating that US regulators and law enforcement agencies are about to levy fines and penalties on some of America's largest banks, verifies that the "take-no-prisoners" approach to Iran sanctions violators is about to name and shame some American financial institutions at the top.
Buried in the details, however is a footnote that should be of critical interest to compliance officers intent upon keeping the Iran scandal out of their banks: that most of the suspicious transactions, either originating from, or destined for, the Islamic Republic of Iran, involved third-party banks, and that the position of the largest US banks is that they were just acting as middlemen.
Whether this detail will be taken as a mitigating factor in the determination of the size of fines is not known, but what is important is that the accusation of greater culpability will be pointed at the smaller banks, who initiated and/or completed the transactions. Did they cover up the role of Iranian banks or entities ? Did they manipulate or alter the facts ?
US Government investigators will certainly be taking a hard look at financial institutions located in those jurisdictions which have correspondent relationships with the big American banks AND are known to have had long-established relationships with Iranian banks and entities. Banks located in the UAE, especially Dubai, Venezuela* and Panama would seem to be the prime candidates for intensive queries.
The matter is made even more serious by the fact that banks in both countries have subsidiaries, branches, agencies, offices, and correspondent relationships in the United States, making them vulnerable to both subpoenas**, and to seizure of assets.
Assessing the level of risk involved in maintaining continuing relationships with banks located in Venezuela and Dubai has been difficult, but given the intensive American efforts to weed out, and exact penalties upon, any financial institution found to be facilitating Iran sanctions evasion, prudence requires that you ensure that you are not unwittingly assisting Venezuelan or UAE banks with their Iran business. The odds are that US investigators, pursuing leads obtained in their quest against major American banks, may uncover transactions that passed through your bank, if you don't catch them first.
Employ Enhanced Due Diligence in your dealings with Venezuelan, UAE and Panamanian banks, lest you get scorched from the heat surrounding the Iran sanctions investigations. Do not let your bank be one of the casualties; check out all suspicious transactions on a real-time basis.
*Venezuelans using 700 Panamanian Companies to Evade Sanctions on Iran
**In Re Grand Jury Proceesings (Bank of Nova Scotia), 740 F.2d 817 (11th Cir.), cert. den. 469 US 1106 (1985).