Switzerland has closed a bank that the U.S. has accused of having ties to Iran and Russia

Switzerland's financial market regulator (FINMA) said on Feb. 27 that it had begun the process of liquidating MBaer Merchant Bank after Washington threatened to deny the Swiss private bank access to the U.S. financial system for violating sanctions against Iran, Russia and Venezuela.

"FINMA's order to liquidate [MBaer Merchant Bank] has entered into force," the regulator said in a statement. It also shows that MBaer had previously been the subject of a "supervisory proceeding" in Switzerland, during which the Swiss regulator found that the bank "failed to ensure adequate anti-money laundering measures and allowed customers to circumvent official asset freezes".

FINMA concluded supervisory proceedings against MBaer three weeks ago, but due to an appeal filed by the bank, the regulator was previously unable to enforce its measures to liquidate the bank. On Friday, February 27, MBaer withdrew the appeal, FINMA said.

"This case is extremely serious. By its actions, [the bank] has exposed itself and the Swiss financial center to disproportionately high risks," FINMA stressed.

The day before, on February 26, it became known that MBaer Merchant Bank may lose access to the U.S. financial system due to alleged ties with Iran and Russia - MBaer Merchant Bank was accused of violating U.S. sanctions by the U.S. Treasury Department. At the same time, the agency said that its financial crime unit FinCEN is working to approve a rule that would prohibit U.S. financial institutions from opening or maintaining correspondent accounts for or on behalf of MBaer.

The rare move would deploy the toughest tool in the U.S. sanctions enforcement arsenal, Reuters pointed out . The measure would effectively deny MBaer access to dollar settlements, which could jeopardize its international operations. This is probably the first time the U.S. is going to apply it to a Swiss bank, the agency noted.

This article was AI-translated and verified by a human editor