FinCEN Releases Data Showing $9 Billion In Iranian Shadow Banking Activity

On October 23, 2025, the U.S. Department of the Treasury's Financial Crimes Enforcement Network ("FinCEN") issued a Financial Trend Analysis ("FTA"), identifying $9 billion of potential Iranian shadow banking activity in 2024, based on reporting from U.S. financial institutions. Treasury issues FTAs periodically with threat pattern and trend information derived from Bank Secrecy Act (BSA) filings, pursuant to section 6206 of the Anti-Money Laundering Act of 2020 (AMLA).

Background on Iranian Illicit Activity

The latest FTA expands on information in a June 6 FinCEN Advisory, which urged U.S. financial institutions to be vigilant in detecting the Iranian regime's illicit activities and attempts to exploit the U.S. financial system. Replacing FinCEN's 2018 Advisory on the Iranian regime's illicit activities, the June Advisory provided updated red flags and current trends and typologies for Iranian sanctions evasion, oil smuggling, shadow banking networks, and weapons procurement, to assist financial institutions in identifying, preventing, and reporting suspicious activity connected with Iranian illicit financial activity.

The Advisory and recent FTA, which elaborates on how Iran evades sanctions and generates illicit revenue to support nuclear weapons, ballistic missile, and unmanned aerial vehicle (UAV) programs, support the U.S. "maximum pressure campaign" against Iran announced earlier this year in a February 4 National Security Presidential Memorandum ("NSPM-2").

Concurrent with the June 6 Advisory, Treasury's Office of Foreign Assets Control (OFAC) designated more than 30 individuals and entities with ties to Iranian brothers Mansour, Nasser, and Fazlolah Zarringhalam, who laundered billions through the international financial system via Iranian exchange houses and foreign front companies under their control as part of Iran's shadow banking network. The full list of designations made as part of June 6 sanctions action is available here. The June 6 action was the first round of sanctions targeting Iranian shadow banking infrastructure since the issuance of NSPM-2. It was taken pursuant to Executive Order (E.O.) 13902, imposing sanctions on additional sectors of the Iranian economy in January 2020.

The FTA

To develop the recent FTA, FinCEN analyzed BSA information, including Suspicious Activity Reports (SARs), from transactions in 2024 that financial institutions or FinCEN had connected to potential Iranian shadow banking activities. FinCEN restricted the dataset to transactions valued at least $500,000 and removed transactions that BSA data and open source information could not corroborate were linked to Iran. The final data set contained 2,027 transactions, totaling $9 billion in activity.

According to FinCEN, its analysis revealed many aspects of the complex financial and corporate infrastructure that Iran uses to sell sanctioned oil and petrochemicals on the international market, launder the proceeds, and procure export-controlled technology for Iran's military and nuclear program. The analysis shed further light on how shadow banking networks operate, expanding on prior findings about how Iran's Ministry of Defense and Armed Forces Logistics (MODAFL) and Islamic Revolutionary Guard Corps (IRGC) gain access to the international financial system, launder billions of dollars, and engage in revenue-generating activities such as sale of oil and petrochemicals. MODAFL was designated most recently in 2019 for assisting IRGC Qods Force (IRGC-QF), which was designated in 2007 for supporting multiple terrorist groups.

Based on the latest trend analysis, Iranian shadow banking networks operate across continents to connect Iranian front companies, including oil, shell, shipping, investment, and technology procurement companies, which transact billions of dollars amongst themselves and with other companies. Iranian shadow banking has a prominent presence in United Arab Emirates (UAE), Hong Kong, and Singapore. The Iranian regime relies on these networks, which also include exchange houses, to gain access to the U.S. dollar and U.S. financial system through U.S. correspondence accounts. This access allows Iran to export oil and other commodities, launder the proceeds, and generate funds to advance its military weapons programs and support terrorist groups.

FinCEN made several significant findings as part of its analysis. Here are the key takeaways:

• Foreign shell companies appear to play the largest role in Iranian shadow banking activities. Likely shell companies—exhibiting multiple indicators of shell activity like no verifiable business activity, little internet presence, or use of a shared address—transacted approximately $5 billion in 2024. These companies sent $4.2 billion, mostly from China-based non-resident accounts (NRAs) operated by Hong Kong-based entities. Likely shell companies received $4.3 billion, which was mostly received by UAE-based shell companies.
• FinCEN found dozens of oil companies to be likely Iranian front companies, which transacted $4 billion in 2024, potentially for illicit oil sales. These were primarily based on UAE and Singapore.
• Potential technology procurement companies received funds from Iran-linked entities. Companies suspected of facilitating Iran's procurement of export-controlled technology engaged in an estimated $413 million in transactions in 2024.
• International shipping companies may have transported sanctioned Iranian oil. FinCEN found that dozens of shipping companies transacted approximately $707 million, potentially to transport sanctioned Iranian oil and petrochemicals. Most of these companies were based in Iraq, UAE, or Hong Kong.
• Foreign investment companies potentially gave Iran access to international investment markets. Based on its analysis, FinCEN determined that UK and UAE investment companies transacted about $665 million, potentially to provide Iranian entities with access to international investment trading.
• Iranian entities potentially exploited U.S. financial institutions. FinCEN found that the approximately $9 billion of shadow banking funds in 2024 passed though correspondent accounts maintained at U.S.-based financial institutions. FinCEN identified two foreign companies that transferred $534 million from U.S. bank accounts to Iran-linked entities. It also found that foreign companies, including Iran-linked entities, transacted $361 million using accounts with foreign branches of U.S.-based financial institutions and $174 million using accounts with foreign subsidiaries of U.S.-based financial institutions.
• FinCEN also found that the UK and Switzerland financial systems are potentially vulnerable to Iranian shadow banking. It found UK-based companies transacted $540 million using accounts at UK- or Switzerland-based financial institutions, and that Switzerland-based companies transacted $115 million and foreign companies transacted $503 million using accounts at Switzerland-based financial institutions and Swiss branches of foreign financial institutions.

FinCEN's analysis also provides case studies and infographics to illustrate its findings, and can be accessed online here: https://www.fincen.gov/system/files/2025-10/FTA-Iranian-Shadow-Banking.pdf.

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