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Proposed Rule2026-04033

Proposal of Special Measure Regarding MBaer Merchant Bank AG as a Financial Institution Operating Outside of the United States of Primary Money Laundering Concern

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Published

March 2, 2026

Issuing agencies

Treasury DepartmentFinancial Crimes Enforcement Network

Abstract

FinCEN is issuing a notice of proposed rulemaking, pursuant to section 311 of the USA PATRIOT Act, that finds MBaer Merchant Bank AG (MBaer), a financial institution based in Switzerland, to be of primary money laundering concern, and proposes imposing a special measure to: (1) prohibit U.S. financial institutions from opening or maintaining a correspondent account for, or on behalf of, MBaer; (2) require U.S. financial institutions to take reasonable steps not to process a transaction for the correspondent account in the United States of a foreign banking institution if such a transaction involves MBaer; and (3) require U.S. financial institutions to apply special due diligence to their foreign correspondent accounts that is reasonably designed to guard against their use to process transactions involving MBaer.

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<title>Federal Register, Volume 91 Issue 40 (Monday, March 2, 2026)</title>
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[Federal Register Volume 91, Number 40 (Monday, March 2, 2026)]
[Proposed Rules]
[Pages 10034-10048]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04033]

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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network

31 CFR Part 1010

RIN 1506-AB71

Proposal of Special Measure Regarding MBaer Merchant Bank AG as a
Financial Institution Operating Outside of the United States of Primary
Money Laundering Concern

AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.

[[Page 10035]]

ACTION: Notice of proposed rulemaking.

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SUMMARY: FinCEN is issuing a notice of proposed rulemaking, pursuant to
section 311 of the USA PATRIOT Act, that finds MBaer Merchant Bank AG
(MBaer), a financial institution based in Switzerland, to be of primary
money laundering concern, and proposes imposing a special measure to:
(1) prohibit U.S. financial institutions from opening or maintaining a
correspondent account for, or on behalf of, MBaer; (2) require U.S.
financial institutions to take reasonable steps not to process a
transaction for the correspondent account in the United States of a
foreign banking institution if such a transaction involves MBaer; and
(3) require U.S. financial institutions to apply special due diligence
to their foreign correspondent accounts that is reasonably designed to
guard against their use to process transactions involving MBaer.

DATES: Written comments on the notice of proposed rulemaking must be
submitted on or before April 1, 2026.

ADDRESSES: Comments must be submitted in one of the following two ways
(please choose only one of the ways listed):
<bullet> Federal E-rulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
If you are reading this document on <a href="http://federalregister.gov">federalregister.gov</a>, you may use
the green ``SUBMIT A PUBLIC COMMENT'' button beneath this rulemaking's
title to submit a comment to the <a href="http://regulations.gov">regulations.gov</a> docket.
<bullet> Mail: Financial Crimes Enforcement Network, P.O. Box 39,
Vienna, VA 22183. Refer to Docket Number FINCEN-2026-0001 in the
submission.
Do not include any personally identifiable information (such as
name, address, or other contact information) or confidential business
information that you do not want publicly disclosed. All comments are
public records; they are publicly displayed exactly as received, and
will not be deleted, modified, or redacted. Comments may be submitted
anonymously. Follow the search instructions on <a href="https://www.regulations.gov">https://www.regulations.gov</a> to view public comments.

FOR FURTHER INFORMATION CONTACT: The FinCEN Regulatory Support Section
at <a href="http://www.fincen.gov/contact">www.fincen.gov/contact</a>.

SUPPLEMENTARY INFORMATION:

I. Statutory Provisions

Section 311 of the USA PATRIOT Act \1\ (section 311), codified at
31 U.S.C. 5318A, grants the Secretary of the Treasury (Secretary) the
authority to make a finding that ``reasonable grounds exist for
concluding'' that any of the following ``is of primary money laundering
concern'':
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\1\ Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56, 115 Stat. 272 (Oct. 26, 2001) (USA PATRIOT Act).
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(i) A jurisdiction outside of the United States;
(ii) One or more financial institutions operating outside of the
United States;
(iii) One or more classes of transactions within, or involving, a
jurisdiction outside of the United States; or
(iv) One or more types of accounts.\2\
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\2\ 31 U.S.C. 5318A(a)(1).
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Upon making such a finding, the Secretary is authorized to require
domestic financial institutions and domestic financial agencies--
collectively, ``covered financial institutions''--to take certain
``special measures.'' Specifically, pursuant to section 311, the
Secretary may impose one or more of five possible special measures as
safeguards to defend the U.S. financial system from money laundering
and terrorist financing risks. Through special measures one through
four, the Secretary may impose additional recordkeeping, information
collection, and reporting requirements on covered financial
institutions.\3\ Through special measure five, the Secretary may
``prohibit, or impose conditions upon, the opening or maintaining in
the United States of a correspondent account or payable-through
account'' for or on behalf of a foreign banking institution, if such
correspondent account or payable-through account involves the financial
institution operating outside of the United States found to be of
primary money laundering concern.\4\
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\3\ 31 U.S.C. 5318A(b)(1)-(4). For purposes of this proposed
rulemaking, the term ``covered financial institution'' has the same
meaning as provided at 31 CFR 1010.605(e)(1); see infra Section
VI.A.3.
\4\ 31 U.S.C. 5318A(b)(5).
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Before making a finding that reasonable grounds exist for
concluding that a financial institution operating outside of the United
States (or other jurisdiction, account, or class of transactions) is of
primary money laundering concern, the Secretary is required to consult
with both the Secretary of State and the Attorney General.\5\ In
addition, among the information the Secretary determines to be relevant
in making such a finding about a financial institution, the Secretary
is required to consider the following potentially relevant
institutional factors:
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\5\ 31 U.S.C. 5318A(c)(1).
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<bullet> The extent to which such a financial institution is used
to facilitate or promote money laundering in or through a jurisdiction
outside the United States, including any money laundering activity by
organized criminal groups, international terrorists, or entities
involved in the proliferation of weapons of mass destruction (WMD) or
missiles.
<bullet> The extent to which such a financial institution is used
for legitimate business purposes in the jurisdiction; and
<bullet> The extent to which the action being proposed is
sufficient to ensure, with respect to transactions involving the
jurisdiction and institutions operating in the jurisdiction, that the
purposes of section 311 continue to be fulfilled, and to guard against
international money laundering and other financial crimes.\6\
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\6\ 31 U.S.C. 5318A(c)(2)(B)(i)-(iii). In addition, in the case
of a finding relating to a particular jurisdiction, section 311 sets
out certain ``jurisdictional factors'' that the Secretary may
consider, which are not relevant here. See 31 U.S.C.
5318A(c)(2)(A)(i)-(vii).
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In selecting one or more special measures, the Secretary ``shall
consult with the Chairman of the Board of Governors of the Federal
Reserve System, any other appropriate Federal banking agency (as
defined in section 3 of the Federal Deposit Insurance Act), the
Secretary of State, the Securities and Exchange Commission, the
Commodity Futures Trading Commission, the National Credit Union
Administration Board, and in the sole discretion of the Secretary, such
other agencies and interested parties as the Secretary may find
appropriate.'' \7\ When imposing special measure five, the Secretary
must do so ``in consultation with the Secretary of State, the Attorney
General, and the Chairman of the Board of Governors of the Federal
Reserve System.'' \8\ In addition, the Secretary is required to
consider the following factors:
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\7\ 31 U.S.C. 5318A(a)(4)(A).
\8\ 31 U.S.C. 5318A(b)(5).
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<bullet> Whether similar action has been or is being taken by other
nations or multilateral groups;
<bullet> Whether the imposition of any particular special measure
would create a significant competitive disadvantage, including any
undue cost or burden associated with compliance, for financial
institutions organized or licensed in the United States;
<bullet> The extent to which the action or the timing of the action
would have a significant adverse systemic impact on

[[Page 10036]]

the international payment, clearance, and settlement system, or on
legitimate business activities involving the particular jurisdiction,
institution, class of transactions, or type of account; and
<bullet> The effect of the action on United States national
security and foreign policy.\9\
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\9\ 31 U.S.C. 5318A(a)(4)(B)(i)-(iv).
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The authority of the Secretary to administer the Bank Secrecy Act
(BSA) \10\ and its implementing regulations, including the authority
under section 311 to make such a finding and to impose special
measures, has been delegated to FinCEN.\11\
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\10\ The BSA, as amended, is the popular name for a collection
of statutory authorities that FinCEN administers that is codified at
12 U.S.C. 1829b, 1951-1960 and 31 U.S.C. 5311-5314, 5316-5336, and
includes other authorities reflected in notes thereto. Regulations
implementing the BSA appear at 31 CFR Chapter X.
\11\ See Treasury Order 180-01 (Jan. 14, 2020).
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II. Summary

Switzerland-based MBaer Merchant Bank AG (MBaer) is a small,
private Swiss financial institution with a single office headquartered
in Z[uuml]rich, Switzerland, offering a variety of financial
services.\12\ Based on public and non-public information, FinCEN
assesses that, for years, MBaer has directly or indirectly facilitated
money laundering for or on behalf of illicit actors, including through
processing transactions related to Venezuelan corruption and Russian
and Iranian illicit activities.
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\12\ MBaer, The services, <a href="https://www.mbaerbank.com/eng/the-services">https://www.mbaerbank.com/eng/the-services</a> (last accessed Jan. 7, 2026); MBaer, Heritage & history,
<a href="https://www.mbaerbank.com/eng/the-bank/heritage-history">https://www.mbaerbank.com/eng/the-bank/heritage-history</a> (last
accessed Jan. 7, 2026); MBaer, Ownership, <a href="https://www.mbaerbank.com/eng/the-bank/ownership">https://www.mbaerbank.com/eng/the-bank/ownership</a> (last accessed Jan. 7, 2026). TheBanks.eu,
MBaer Merchant Bank AG--Business Summary, <a href="https://thebanks.eu/banks/19055#products">https://thebanks.eu/banks/19055#products</a> (last accessed Jan. 7, 2026).
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This NPRM sets forth FinCEN's finding, based on public and non-
public information, that MBaer is a financial institution operating
outside of the United States of primary money laundering concern.
Accordingly, FinCEN proposes that, under special measure five, covered
financial institutions: (1) be prohibited from opening or maintaining a
correspondent account for, or on behalf of, MBaer; (2) take reasonable
steps not to process a transaction for the correspondent account in the
United States of a foreign banking institution if such a transaction
involves MBaer; and (3) apply special due diligence to their foreign
correspondent accounts that is reasonably designed to guard against
their use to process transactions involving MBaer.

III. Finding That MBaer Is a Financial Institution Operating Outside of
the United States

As set forth above, section 311 authorizes FinCEN, through
delegated authority and in pertinent part, to make a finding ``that
reasonable grounds exist for concluding'' that ``[one] or more
financial institutions operating outside of the United States'' is ``of
primary money laundering concern.'' \13\ A prerequisite to such a
finding is that the relevant institution is a ``financial institution
operating outside of the United States.'' \14\
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\13\ 31 U.S.C. 5318A(a)(1).
\14\ 31 U.S.C. 5318A(a)(1) authorizes the imposition of special
measures on, among others, ``financial institutions operating
outside of the United States.'' Of the five special measures
authorized by the statute, the fifth measure authorizes
``Prohibitions or Conditions on Opening or Maintaining Certain
Correspondent or Payable-Through Accounts.'' The statute goes on to
define the terms ``correspondent account'' and ``payable-through
account'' with reference to payments made on behalf of a ``foreign
financial institution''--a term otherwise undefined. For the
purposes of this NPRM, and under these facts, FinCEN finds that
MBaer is both a foreign financial institution and a financial
institution outside of the United States.
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MBaer is a commercial bank with a single office headquartered in
Z[uuml]rich, Switzerland.\15\ A ``financial institution'' for purposes
of section 311 includes ``a commercial bank or trust company.'' \16\
MBaer is therefore a financial institution within the meaning of
section 311.
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\15\ MBaer has no branches other than its headquarters location.
\16\ 31 U.S.C. 5312(a)(2)(B).
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Established in 2018, MBaer operates under Swiss banking regulations
and is regulated by the Swiss Financial Markets Supervisory Authority
(FINMA), the Swiss financial supervisor.\17\ MBaer advertises itself as
a bank for entrepreneurs, offering a variety of financial services,
including but not limited to depository accounts for individuals and
businesses, funds transmission, and wealth management.\18\ MBaer is
majority owned by Swiss investors with minority shareholders based in
Asia and the Middle East.\19\ Accordingly, FinCEN finds that reasonable
grounds exist to conclude that MBaer is a financial institution
operating outside of the United States.
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\17\ FINMA, Authorized Institutions, <a href="https://www.finma.ch/en/finma-public/authorised-institutions-individuals-and-products">https://www.finma.ch/en/finma-public/authorised-institutions-individuals-and-products</a>.
\18\ MBaer, The services, <a href="https://www.mbaerbank.com/eng/the-services">https://www.mbaerbank.com/eng/the-services</a> (last accessed Jan. 7, 2026); TheBanks.eu, MBaer Merchant
Bank AG (Switzerland)--Business Summary, <a href="https://thebanks.eu/banks/19055#products">https://thebanks.eu/banks/19055#products</a> (last accessed Jan. 7, 2026).
\19\ MBaer, Ownership, <a href="https://www.mbaerbank.com/eng/the-bank/ownership">https://www.mbaerbank.com/eng/the-bank/ownership</a> (last accessed Jan. 7, 2026).
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IV. Finding That MBaer Is of Primary Money Laundering Concern

Pursuant to 31 U.S.C. 5318A(a)(1), FinCEN finds that reasonable
grounds exist for concluding that MBaer is a financial institution
operating outside of the United States of primary money laundering
concern. Below is a discussion of the relevant statutory factors FinCEN
considered in making this finding.

A. The Extent to Which MBaer Is Used To Facilitate or Promote Money
Laundering, Including Any Money Laundering Activity by Organized
Criminal Groups, International Terrorists, or Entities Involved in the
Proliferation of WMD or Missiles

Based on public and non-public information, FinCEN assesses that
MBaer is used to facilitate money laundering and terrorist financing,
as demonstrated through: (1) MBaer's business model; (2) MBaer's
facilitation of Venezuelan corruption and money laundering; (3) MBaer's
facilitation of Russian money laundering; and (4) MBaer's facilitation
of Iranian money laundering and terrorist financing.
1. An Overview of MBaer's Business Model
Founded in December 2018, MBaer is a small, private Swiss financial
institution with a single office headquartered in Z[uuml]rich,
Switzerland, offering a variety of financial services.\20\ FinCEN
assess that, since its founding, MBaer has profited from offering these
services to customers that engage in money laundering. While financial
institutions may mitigate money laundering risks through risk-based
anti-money laundering/countering the financing of terrorism (AML/CFT)
programs, MBaer maintained a higher-risk customer base without
implementing sufficiently mitigating controls that would prohibit such
customers from engaging in illicit activities, and in some cases
deliberately acted to facilitate those illicit activities. Indeed,
based on public and non-public information, FinCEN assesses that, as
set out below, MBaer executives and employees should have been aware
of, and in some cases were likely complicit in, their clients' money

[[Page 10037]]

laundering activities, including money laundering through shell
companies that conceal the true nature of, and parties involved in,
illicit transactions.
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\20\ MBaer, The services, <a href="https://www.mbaerbank.com/eng/the-services">https://www.mbaerbank.com/eng/the-services</a> (last accessed Jan. 7, 2026); MBaer, Heritage & history,
<a href="https://www.mbaerbank.com/eng/the-bank/heritage-history">https://www.mbaerbank.com/eng/the-bank/heritage-history</a> (last
accessed Jan. 7, 2026); MBaer, Ownership, <a href="https://www.mbaerbank.com/eng/the-bank/ownership">https://www.mbaerbank.com/eng/the-bank/ownership</a> (last accessed Jan. 7, 2026). TheBanks.eu,
MBaer Merchant Bank AG--Business Summary, <a href="https://thebanks.eu/banks/19055#products">https://thebanks.eu/banks/19055#products</a> (last accessed Jan. 7, 2026).
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2. MBaer's Beginnings Anchored in Venezuela Corruption
Venezuela's state-oil company, Petr[oacute]leos de Venezuela, SA
(PdVSA), was plundered over decades, resulting in billions of dollars
lost to corruption.\21\ The schemes involved bribery, money laundering,
and the mismanagement of funds, leading to U.S. and international
investigations around the time of the founding of MBaer in 2018. Those
investigations resulted in charges against individuals involved in
schemes to launder money, former PdVSA officials pleading guilty, and
U.S. sanctions against PdVSA and the networks of individuals and
entities that facilitated the corrupt activities.\22\
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\21\ See, e.g., Treasury, Press Release, Treasury Targets
Venezuela Currency Exchange Network Scheme Generating Billions of
Dollars for Corrupt Regime Insiders (Jan. 8, 2019), <a href="https://home.treasury.gov/news/press-releases/sm583">https://home.treasury.gov/news/press-releases/sm583</a>.
\22\ See, e.g., U.S. Department of Justice, Press Release,
Former Swiss Bank Executive Pleads Guilty to Role in Billion-Dollar
International Money Laundering Scheme Involving Funds Embezzled from
Venezuelan State-Owned Oil Company (Aug. 22, 2018), <a href="https://www.justice.gov/archives/opa/pr/former-swiss-bank-executive-pleads-guilty-role-billion-dollar-international-money-laundering">https://www.justice.gov/archives/opa/pr/former-swiss-bank-executive-pleads-guilty-role-billion-dollar-international-money-laundering</a>; U.S.
Department of Justice, Press Release, Former Executive Director at
Venezuela State-Owned Oil Company, Petroleos De Venezuelas, S.A.,
Pleads Guilty to Role in Billion-Dollar Money Laundering Scheme
(Oct. 31, 2018), <a href="https://www.justice.gov/archives/opa/pr/former-executive-director-venezuelan-state-owned-oil-company-petroleos-de-venezuela-sa-pleads">https://www.justice.gov/archives/opa/pr/former-executive-director-venezuelan-state-owned-oil-company-petroleos-de-venezuela-sa-pleads</a>; U.S. Department of Justice, Press Release, Five
Former Venezuelan Government Officials Charged in Money Laundering
Scheme Involving Foreign Bribery (Feb. 12, 2018), <a href="https://www.justice.gov/archives/opa/pr/five-former-venezuelan-government-officials-charged-money-laundering-scheme-involving-forei-0">https://www.justice.gov/archives/opa/pr/five-former-venezuelan-government-officials-charged-money-laundering-scheme-involving-forei-0</a>;
Treasury, Press Release, Treasury Sanctions Venezuela's State Owned
Oil Company Petroleos de Venezuela, S.A. (Jan. 29, 2019), <a href="https://home.treasury.gov/news/press-releases/sm594">https://home.treasury.gov/news/press-releases/sm594</a>; Treasury, Press
Release, Treasury Targets Venezuelan Oil Sector Sanctions Evasion
Network (Jan. 19, 2021), <a href="https://home.treasury.gov/news/press-releases/sm1239">https://home.treasury.gov/news/press-releases/sm1239</a>.
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According to public information, beginning in 2020 and coinciding
with the timeframe when the illicit networks connected to PdVSA would
have been seeking alternate financial institutions through which to
launder their funds as international pressure grew and investigations
broadened, the recently founded MBaer played a key role in handling
funds tied to the PdVSA oil corruption schemes. A former MBaer Vice
Chairperson of the Board has been accused in press reports of using the
bank to launder proceeds of Venezuelan corruption related to a PdVSA
corruption scheme, in which Treasury's Office of Foreign Assets Control
(OFAC)-designated PdVSA allegedly secretly sold millions of barrels of
Venezuelan crude oil in circumvention of U.S. sanctions and embezzled
the proceeds of said sales in a manner that deprived the Venezuelan
public of the benefits of these illegal sales.\23\ Specifically, Siri
Evjemo-Nysveen (Evjemo-Nysveen), MBaer's Vice Chairperson from
September 2020 through May 2023 and board member from 2019 to 2023,
reportedly used her position to further payments through MBaer related
to a PdVSA corruption scheme after OFAC's designation of PdVSA.\24\ She
reportedly did so on behalf of her husband, Alessandro Bazzoni
(Bazzoni), a minority shareholder of MBaer at the time, who was
sanctioned by OFAC in January 2021 for providing material support to
PdVSA in his role as a core facilitator of the sanctions evasion
network.\25\ Although Bazzoni has since been removed from the OFAC
sanctions list, Evjemo-Nysveen's activities took place while he was on
the OFAC list.
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\23\ Treasury, Press Release, Treasury Sanctions Venezuela's
State-Owned Oil Company Petroleos de Venezuela, S.A. (Jan. 28,
2019), <a href="https://home.treasury.gov/news/press-releases/sm594">https://home.treasury.gov/news/press-releases/sm594</a>; El
Nacional, The Swiss-Emirati connection to corruption in PDVSA (Sept.
13, 2023), <a href="https://www.elnacional.com/2023/09/la-conexion-suiza-emirati-de-la-corrupcion-en-pdvsa/">https://www.elnacional.com/2023/09/la-conexion-suiza-emirati-de-la-corrupcion-en-pdvsa/</a>; The Politician, First Report
Unveils the Network That Moved Millions from PDVSA Corruption (May
17, 2023), <a href="https://noticias2025.com/primer-informe-devela-la-red-que-movio-millones-de-la-corrupcion-de-pdvsa/">https://noticias2025.com/primer-informe-devela-la-red-que-movio-millones-de-la-corrupcion-de-pdvsa/</a> pdvsa/; Transparencia
Venezuela, PDVSA-Crypto (Oct. 1, 2023), <a href="https://transparenciave.org/wp-content/uploads/2024/03/PDVSA-CRYPTO-An-precedented-Fraud-with-Tremendous-Economic-and-Social-Impact-_OCT2023.pdf">https://transparenciave.org/wp-content/uploads/2024/03/PDVSA-CRYPTO-An-precedented-Fraud-with-Tremendous-Economic-and-Social-Impact-_OCT2023.pdf</a>.
\24\ See El Nacional, The Swiss-Emirati connection to corruption
in PDVSA (Sept. 13, 2023), <a href="https://www.elnacional.com/2023/09/la-conexion-suiza-emirati-de-la-corrupcion-en-pdvsa/">https://www.elnacional.com/2023/09/la-conexion-suiza-emirati-de-la-corrupcion-en-pdvsa/</a>; The Politician,
First Report Unveils the Network That Moved Millions from PDVSA
Corruption (May 17, 2023), <a href="https://noticias2025.com/primer-informe-devela-la-red-que-movio-millones-de-la-corrupcion-de-pdvsa/">https://noticias2025.com/primer-informe-devela-la-red-que-movio-millones-de-la-corrupcion-de-pdvsa/</a> pdvsa/;
Transparencia Venezuela, PDVSA-Crypto (Oct. 1, 2023), <a href="https://transparenciave.org/wp-content/uploads/2024/03/PDVSA-CRYPTO-An-precedented-Fraud-with-Tremendous-Economic-and-Social-Impact-_OCT2023.pdf">https://transparenciave.org/wp-content/uploads/2024/03/PDVSA-CRYPTO-An-precedented-Fraud-with-Tremendous-Economic-and-Social-Impact-_OCT2023.pdf</a>.
\25\ See Hable Se, Was the Swiss connection of Siri Evjemo-
Nysveen and Alessandro Bazzoni with the MBaer Merchant Bank at the
service of oil corruption in Venezuela? (June 24, 2023), <a href="https://hable.se/2023/06/estuvo-la-conexion-suiza-de-siri-evjemo-nysveen-y-alessandro-bazzoni-con-el-mbaer-merchant-bank-al-servicio-de-la-corrupcion-petrolera-en-venezuela.html">https://hable.se/2023/06/estuvo-la-conexion-suiza-de-siri-evjemo-nysveen-y-alessandro-bazzoni-con-el-mbaer-merchant-bank-al-servicio-de-la-corrupcion-petrolera-en-venezuela.html</a>; Infodio, Did SEC approve
Michael Bar's offering in U.S. soil? (June 24, 2021), <a href="https://infodio.com/21062021/sec/gov/michael/baer/mbaer/francisco/dagostino/alessandro/bazzoni">https://infodio.com/21062021/sec/gov/michael/baer/mbaer/francisco/dagostino/alessandro/bazzoni</a>; AlbertoNews, First Report: Italian businessman
Alessandro Bazzoni, Tareck El Aissami's operative, to defy US
sanctions (Nov. 16, 2023), <a href="https://bitlyanews.com/internacionales/primer-informe-el-empresario-italiano-alessandro-bazzoni-el-operador-de-tareck-el-aissami-para-desafiar-las-sanciones-de-estados-unidos/">https://bitlyanews.com/internacionales/primer-informe-el-empresario-italiano-alessandro-bazzoni-el-operador-de-tareck-el-aissami-para-desafiar-las-sanciones-de-estados-unidos/</a>; abc Noticias, Richard David Rothenberg, Erik
Roveta's Partner, Key in the $21 Billion Embezzlement from PdVSA
(Aug. 8, 2023), <a href="https://www.abcnoticias.net/richard-david-rothenberg-socio-de-erik-roveta-clave-en-desfalco-a-pdvsa-por-21-mil-millones-de-dolares/">https://www.abcnoticias.net/richard-david-rothenberg-socio-de-erik-roveta-clave-en-desfalco-a-pdvsa-por-21-mil-millones-de-dolares/</a>; Alberto News, Argentina arrests Jorge
Germ[aacute]n Bonelli, front man of Alessandro Bazzoni and Siri
Evjemo-Nysveen: linked to corruption at PDVSA (Mar. 22, 2024),
<a href="https://albertonews.com/nacionales/argentina-detiene-a-jorge-german-bonelli-testaferro-de-alessandro-bazzoni-y-siri-evjemo-nysveen-vinculado-a-la-corrupcion-en-pdvsa">https://albertonews.com/nacionales/argentina-detiene-a-jorge-german-bonelli-testaferro-de-alessandro-bazzoni-y-siri-evjemo-nysveen-vinculado-a-la-corrupcion-en-pdvsa</a>; The Politician, First Report
Unveils the Network That Moved Millions from PDVSA Corruption (May
17, 2023), <a href="https://noticias2025.com/primer-informe-devela-la-red-que-movio-millones-de-la-corrupcion-de-pdvsa/">https://noticias2025.com/primer-informe-devela-la-red-que-movio-millones-de-la-corrupcion-de-pdvsa/</a>.
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Further, while the PdVSA money laundering scheme was ongoing, MBaer
maintained an account for Jose Luis Chavez Calva (Calva), a key figure
involved in laundering billions of dollars obtained through PdVSA
corruption through European banks.\26\ Calva was also alleged to be a
financial facilitator handling funds derived from corruption on behalf
of both Bazzoni and Alex Saab, a close associate of Bazzoni who was
also sanctioned by OFAC for his prominent role in laundering funds
derived from Venezuelan public corruption.\27\
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\26\ Cuentas Claras Digital, Venezuelan Prosecutor's Office
issues arrest warrant against international operators involved in
the PDVSA-Crypto scheme (June 26, 2023), <a href="https://www.cuentasclarasdigital.org/2023/06/fiscalia-de-venezuela-emite-orden-de-detencion-contra-operadores-internacionales-involucrados-en-el-esquema-pdvsa-cripto/">https://www.cuentasclarasdigital.org/2023/06/fiscalia-de-venezuela-emite-orden-de-detencion-contra-operadores-internacionales-involucrados-en-el-esquema-pdvsa-cripto/</a>; El Farro del Morro, Who are the 17
fugitives in the PDVSA Crypto case? (Aug. 24, 2023), <a href="https://elfarodelmorro.net/pdvsa-cripto-interpol/">https://elfarodelmorro.net/pdvsa-cripto-interpol/</a>; C[aacute]mara Boliviana
de Hidrocarburos y Energ[iacute]a, Venezuela--Esc[aacute]ndalo de
corrupci[oacute]n de PDVSA en la mira de agencias federales en EEUU
(Apr. 5, 2023), <a href="https://www.cbhe.org.bo/index.php/noticias/63379-venezuela-escandalo-do-corrupcion-de-pdvsa-en-la-mira-de-agencias-federales-en-eeuu">https://www.cbhe.org.bo/index.php/noticias/63379-venezuela-escandalo-do-corrupcion-de-pdvsa-en-la-mira-de-agencias-federales-en-eeuu</a>.
\27\ Id.; Treasury, Press Release, Treasury Disrupts Corruption
Network Stealing From Venezuela's Food Distribution Program, CLAP
(July 25, 2019), <a href="https://home.treasury.gov/news/press-releases/sm741">https://home.treasury.gov/news/press-releases/sm741</a>.
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According to public and non-public information, MBaer also
maintained accounts for two companies controlled by a Swiss investor
named in press reporting as early as 2021 as linked to the regime of
Nicol[aacute]s Maduro in Venezuela.\28\ As of early 2025 he was
allegedly under investigation by Swiss and French authorities for
laundering the proceeds of funds embezzled by Venezuelan public
officials, including through airline Plus Ultra Lineas Aereas SA (Plus
Ultra).\29\ Given that one of the

[[Page 10038]]

Swiss investor's two MBaer accounts received over $519,000 in 2021 from
Plus Ultra, and that the same account paid a salary to an individual
later named as a facilitator of the laundering, FinCEN assesses that
the account was likely used to launder funds derived from Venezuelan
public corruption.
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\28\ Voz Populi, Plus Ultra guaranteed 1.3 million of the
bailout to a Swiss lender linked to Chavismo (June 16, 2021),
<a href="https://www.vozpopuli.com/economia/plus-ultra-suizo.html">https://www.vozpopuli.com/economia/plus-ultra-suizo.html</a>; Voz
Populi, Switzerland is investigating a Plus Ultra creditor for money
laundering after he received ransom money (Feb. 13, 2025), <a href="https://www.vozpopuli.com/espana/suiza-investiga-por-blanqueo-a-un-acreedor-de-plus-ultra-que-recibio-dinero-del-rescate.html">https://www.vozpopuli.com/espana/suiza-investiga-por-blanqueo-a-un-acreedor-de-plus-ultra-que-recibio-dinero-del-rescate.html</a>.
\29\ Voz Populi, One out of every four million from the Plus
Ultra bailout will go to companies linked to Chavismo (June 21,
2021), <a href="https://www.vozpopuli.com/economia/plus-ultra-chavismo.html">https://www.vozpopuli.com/economia/plus-ultra-chavismo.html</a>;
Voz Populi, Plus Ultra guaranteed 1.3 million of the bailout to a
Swiss lender linked to Chavismo (June 16, 2021), <a href="https://www.vozpopuli.com/economia/plus-ultra-suizo.html">https://www.vozpopuli.com/economia/plus-ultra-suizo.html</a>; Voz Populi,
Switzerland is investigating a Plus Ultra creditor for money
laundering after he received ransom money (Feb. 13, 2025), <a href="https://www.vozpopuli.com/espana/suiza-investiga-por-blanqueo-a-un-acreedor-de-plus-ultra-que-recibio-dinero-del-rescate.html">https://www.vozpopuli.com/espana/suiza-investiga-por-blanqueo-a-un-acreedor-de-plus-ultra-que-recibio-dinero-del-rescate.html</a>; Impact Spain
News, 53 million in the air: Anti-corruption authorities tighten the
net around the Plus Ultra bailout (Sept. 30, 2025), <a href="https://impactoespananoticias.es/contenido/31362/53-millones-en-el-aire-anticorrupcion-estrecha-el-cerco-sobre-el-rescate-de-plus">https://impactoespananoticias.es/contenido/31362/53-millones-en-el-aire-anticorrupcion-estrecha-el-cerco-sobre-el-rescate-de-plus</a>.
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Taken together, FinCEN assesses that MBaer's provision of services
to these individuals is emblematic of the bank's AML/CFT program
inadequacies and failure to adequately prevent its customers from using
their MBaer accounts to engage in money laundering.
3. MBaer Exposure to Russian Money Laundering
MBaer also has significant exposure to illicit Russian activity, as
accounts belonging to Russian persons likely represent the largest
portion of its assets under management, and MBaer reportedly relies on
wealthy Russians, some of whom are subject to sanctions, as a central
customer group.\30\ According to non-public information available to
FinCEN, as of late 2024, MBaer had retained its most critical Russian
clients, despite Russia-related sanctions. The bank stored the data of
these Russian clients in a concealed manner. The principal MBaer
employee overseeing all coordination and activities related to MBaer's
Russian clients is a founding partner. These protective measures, put
in place in 2024, coincided with its Swiss regulator opening an
investigation into MBaer.\31\ FinCEN assesses that, giving the timing
of these two events, MBaer, as of late 2024, may be deliberately
concealing information from its regulator in an effort to disguise
Russia-related facts about its client base.
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\30\ Inside Paradeplatz, Oligarch sanctions: Mike B[auml]r's
bank under pressure (Feb. 28, 2022), <a href="https://insideparadeplatz.ch/2022/02/28/oligarchen-sanktionen-mike-baer-unter-druck/">https://insideparadeplatz.ch/2022/02/28/oligarchen-sanktionen-mike-baer-unter-druck/</a>.
\31\ Inside Paradeplatz, Finma has opened enforcement
proceedings against Mike B[auml]r's bank (Sept. 4, 2024), <a href="https://insideparadeplatz.ch/2024/09/04/finma-hat-enforcement-gegen-bank-von-mike-baer-eroeffnet/">https://insideparadeplatz.ch/2024/09/04/finma-hat-enforcement-gegen-bank-von-mike-baer-eroeffnet/</a>.
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FinCEN assesses that at least two of MBaer's employees, in their
role at the bank, have likely enabled the illicit activities of Sergey
Kurchenko (Kurchenko). OFAC designated Kurchenko in 2015 for his role
in misappropriating state assets of Ukraine, or of an economically
significant entity in Ukraine. And, in 2018, OFAC designated one
company controlled by Kurchenko for providing material support to
separatist-controlled regions of eastern Ukraine.\32\ In subsequent
years, Kurchenko has utilized a network of individuals and entities to
engage in money laundering and evasion of OFAC's sanctions.\33\ As of
2022, at least two employees of MBaer probably managed trust and front
companies involved in a Ukrainian sanctions evasion scheme linked to
Kurchenko. FinCEN assesses that MBaer's employees enabled Kurchenko's
money laundering and sanctions evasion schemes through the management
of his trusts and front companies.
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\32\ See Treasury, Press Release, Treasury Sanctions Individuals
and Entities Involved In Sanctions Evasion Related to Russia and
Ukraine (July 30, 2015), <a href="https://home.treasury.gov/news/press-releases/jl0133">https://home.treasury.gov/news/press-releases/jl0133</a>; Treasury, Press Release, Treasury Sanctions
Additional Individuals and Entities in Connection with the Conflict
in Ukraine and Russia's Occupation of Crimea (Jan. 26, 2018),
<a href="https://home.treasury.gov/news/press-releases/sm0266">https://home.treasury.gov/news/press-releases/sm0266</a>.
\33\ See U.S. Department of Justice, Press Release, Two Florida
Steel Traders Sentenced for Money Laundering and Russia-Ukraine
Sanctions Violations (Apr. 19, 2024), <a href="https://www.justice.gov/archives/opa/pr/two-florida-steel-traders-sentenced-money-laundering-and-russia-ukraine-sanctions-violations">https://www.justice.gov/archives/opa/pr/two-florida-steel-traders-sentenced-money-laundering-and-russia-ukraine-sanctions-violations</a>.
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FinCEN also assesses that MBaer has repeatedly facilitated money
laundering efforts by enabling shell companies to execute transactions
for the benefit of various Russian oligarchs and high-risk politically
exposed persons (PEPs) or their close associates, including individuals
engaged in sanctions evasion. FinCEN has identified multiple such
networks suspected of exploiting MBaer's propensity to facilitate high-
risk shell company business to obscure illicit activities.
For example, based on public and non-public information, FinCEN
assesses that MBaer maintained two accounts that were controlled by,
and used to launder the funds of, Victor Volodymyrovych Medvedchuk
(Medvedchuk), a pro-Kremlin Ukrainian politician with close ties to
Russian President Putin.\34\ OFAC sanctioned Medvedchuk in 2014,
pursuant to E.O. 13660, for his role in undermining Ukrainian
sovereignty, and OFAC described him in January 2022 as taking part in
directing a plot to establish a collaborator government in Ukraine in
the wake of a Russian invasion.\35\ On June 4, 2024, the Swiss State
Secretariat for Economic Affairs (SECO), following a May 20, 2024,
European Union (EU) action, sanctioned Medvedchuk, among others, for
spreading disinformation and pro-Russian propaganda to Ukraine and
beyond.\36\ Despite press reporting going back to 2017 asserting
Medvedchuk's control of the two companies holding MBaer accounts, both
accounts remained active and continued to transact in U.S. dollars. At
least one account was active after the imposition of Swiss sanctions.
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\34\ See Kyiv Post, Zakarpattia on verge of ecological
catastrophe, company allegedly linked to Medvedchuk to blame (Oct.
29, 2021), <a href="https://archive.kyivpost.com/ukraine-politics/zakarpattia-on-verge-of-ecological-catastrophe-company-allegedly-linked-to-medvedchuk-to-blame.html">https://archive.kyivpost.com/ukraine-politics/zakarpattia-on-verge-of-ecological-catastrophe-company-allegedly-linked-to-medvedchuk-to-blame.html</a>; Kyiv Post, Ukraine imposes
sanctions on Medvedchuk, his wife, associates, freezes their assets
(Feb. 19, 2021), <a href="https://archive.kyivpost.com/ukraine-politics/ukraine-imposes-sanctions-against-medvedchuk-his-wife-associates-freezes-their-assets.html">https://archive.kyivpost.com/ukraine-politics/ukraine-imposes-sanctions-against-medvedchuk-his-wife-associates-freezes-their-assets.html</a>; Belsat EU, Putin's best friend and
Lukashenko's wallet (May 2021), <a href="https://en.belsat.eu/81619862/putins-best-friend-and-lukashenkos-wallet">https://en.belsat.eu/81619862/putins-best-friend-and-lukashenkos-wallet</a>; EnergyPost.Eu, A
dangerous energy policy: Ukraine, despite war, is making itself
dependent on Russian oil (Sept. 8, 2017), <a href="https://energypost.eu/15647-2/">https://energypost.eu/15647-2/</a>.
\35\ See Treasury, Press Release, Treasury Designates Four
Individuals Involved in Violating Ukrainian Sovereignty (Mar. 17,
2014), <a href="https://home.treasury.gov/news/press-releases/jl2326">https://home.treasury.gov/news/press-releases/jl2326</a>;
Treasury, Press Release, Treasury Sanctions Russian-Backed Actors
Responsible for Destabilization Activities in Ukraine (Jan. 20,
2022), <a href="https://home.treasury.gov/news/press-releases/jy0562">https://home.treasury.gov/news/press-releases/jy0562</a>.
\36\ See State Secretariat for Economic Affairs, Situation in
Ukraine 2024-06-24 (June 4, 2024), <a href="https://www.seco.admin.ch/dam/seco/de/dokumente/Aussenwirtschaft/Wirtschaftsbeziehungen/Exportkontrollen/Sanktionen/Verordnungen/Russland,%20Ukraine/situation_ukraine_2024-06-04.pdf.download.pdf/Situation%20in%20der%20Ukraine_2024-06-04.pdf">https://www.seco.admin.ch/dam/seco/de/dokumente/Aussenwirtschaft/Wirtschaftsbeziehungen/Exportkontrollen/Sanktionen/Verordnungen/Russland,%20Ukraine/situation_ukraine_2024-06-04.pdf.download.pdf/Situation%20in%20der%20Ukraine_2024-06-04.pdf</a>; Official Journal of
the European Union, Council Decision (CFSP) 2024/1508 (May 27,
2024), <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L_202401508">https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L_202401508</a>.
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Moreover, one of the two accounts controlled by Medvedchuk likely
facilitated the attempted theft of Ukrainian state property. The
account was used to remit over $630,000 throughout 2021 to LLC
PrikarpatZakhidTrans, the operator of the Ukrainian section of the
Russian-owned Samara-West oil pipeline. In 2021, the Security Service
of Ukraine stated that employees of LLC PrikarpatZakhidTrans used
forged documents in an attempt to illegally seize the Ukrainian
pipeline, valued at approximately $7.4 million.\37\ Press

[[Page 10039]]

reporting going back to early 2021 asserts that Medvedchuk has
controlled LLC PrikarpatZakhidTrans since 2017 through his wife.\38\
FinCEN therefore assesses that Medvedchuk laundered funds through this
MBaer account in an attempt to illicitly acquire the pipeline using a
company under his control, which allegedly has supplied sanctioned
Russian diesel and oil to Ukraine and the European Union using
Belarusian licenses.\39\ Importantly, according to non-public
information available to FinCEN, this MBaer account continued remitting
USD-denominated funds to LLC PrikarpatZakhidTrans until July 13, 2021--
after the April 2021 statement by the Security Service of Ukraine
linking LLC PrikarpatZakhidTrans to illicit activity, the April 2021
press report linking LLC PrikarpatZakhidTrans to Medvedchuk, and the
2014 sanctions applied to Medvedchuk by the United States.
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\37\ See New Eastern Europe, Zelenskyy takes on Russia's
information warfare campaign against Ukraine (Apr. 11, 2021),
<a href="https://neweasterneurope.eu/2021/04/11/zelenskyy-takes-on-russias-information-warfare-campaign-against-ukraine/">https://neweasterneurope.eu/2021/04/11/zelenskyy-takes-on-russias-information-warfare-campaign-against-ukraine/</a>; Interfax Ukraine, SBU
prevents illegal seizure of eight strategic enterprises of Ukraine
since early 2021 (Oct. 28, 2021), <a href="https://en.interfax.com.ua/news/general/776053.html">https://en.interfax.com.ua/news/general/776053.html</a>; National Anti-Corruption Bureau of Ukraine,
State expert becomes suspect in Samara-Western Direction oil product
pipeline case (Feb. 11, 2021), <a href="https://nabu.gov.ua/en/news/novyny-ekspertu-u-spravi-peredachi-truboprovodu-povidomleno-pro-pidozru/">https://nabu.gov.ua/en/news/novyny-ekspertu-u-spravi-peredachi-truboprovodu-povidomleno-pro-pidozru/</a>.
\38\ See New Eastern Europe, Zelenskyy takes on Russia's
information warfare campaign against Ukraine (Apr. 11, 2021),
<a href="https://neweasterneurope.eu/2021/04/11/zelenskyy-takes-on-russias-information-warfare-campaign-against-ukraine/">https://neweasterneurope.eu/2021/04/11/zelenskyy-takes-on-russias-information-warfare-campaign-against-ukraine/</a>.
\39\ See New Eastern Europe, Zelenskyy takes on Russia's
information warfare campaign against Ukraine (Apr. 11, 2021),
<a href="https://neweasterneurope.eu/2021/04/11/zelenskyy-takes-on-russias-information-warfare-campaign-against-ukraine/">https://neweasterneurope.eu/2021/04/11/zelenskyy-takes-on-russias-information-warfare-campaign-against-ukraine/</a>.
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The second account controlled by Medvedchuk made multiple, round
dollar payments totaling $14.3 million to a same-name account held at a
Russian financial institution. FinCEN assesses that this activity is
indicative of money laundering to disguise Medvedchuk's ownership of
the funds involved.
Separately, since late 2022, MBaer opened and maintained six
separate accounts for a Russian billionaire PEP, family members, and
related entities, despite public reporting that alleges connections to
Russian organized crime, public corruption, illegal asset transfers,
fraudulent schemes, and money laundering. Further, public reporting
alleges the PEP acts as a proxy for U.S.-, EU-, UK-, and Swiss-
sanctioned Dmitry Medvedev, the former President and Prime Minister of
Russia and current Deputy Chairman of the Security Council of the
Russian Federation.\40\ According to non-public information, the funds
transfers associated with these accounts are mostly large, round-dollar
amounts between similarly named accounts, indicative of money
laundering to disguise the ownership of the funds involved. For
example, in late 2023 the PEP's MBaer account originated four
transactions valued at over 14 million euros to accounts held in their
name at another bank.
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\40\ See [Scy][ocy][kcy][acy][lcy][softcy]INFO, Igor Yusufov,
The Oligarch and a Purse of the Medvedev Family Exposed (Jan. 4,
2025), <a href="https://sokalinfo.com/01-101108-04.html">https://sokalinfo.com/01-101108-04.html</a> (last accessed Jan.
7, 2026); The Insider, Medvedev's son works for Yusufov's company:
New evidence of the Russian ex-president's corrupt ties to a
sanctions-dodging oligarch (June 10, 2022), <a href="https://theins.ru/en/corruption/252090">https://theins.ru/en/corruption/252090</a> (last accessed Jan. 7, 2026).
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In a further example, based on public and non-public information,
an MBaer account held by a Russian individual received a single wire of
exactly $10 million from a same-name personal account held at another
financial institution; this unusual transaction, which referenced no
business purpose, occurred one month after publication of press
reporting stating that individual was part of a chain of trust that
facilitated an alleged Moscow-based kleptocratic scheme.\41\
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\41\ See The Moscow Post, Well, quite Karaput: Sobyanin's
developer Pavel Tyo is preparing a `flight' to Paris (Mar. 18,
2024), <a href="https://www.msk-post.com/politics/well_quite_karaput_sobyanins_developer_pavel_tyo_is_preparing_a_flight_to_paris34173/">https://www.msk-post.com/politics/well_quite_karaput_sobyanins_developer_pavel_tyo_is_preparing_a_flight_to_paris34173/</a> (last accessed Jan. 7, 2026).
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Also, based on public and non-public information, FinCEN assesses
that MBaer facilitated a Russian-led money laundering scheme that
embezzled and laundered over $26 million. This scheme involved public
funds derived from Equatorial Guinea in 2019.\42\ Following the theft
of this money from Equatorial Guinea, a portion was likely laundered
through an account at MBaer. Moreover, the relevant account at MBaer
continued to remain active even after Lithuanian law enforcement
authorities indicted the ultimate controlling individual for large-
scale money laundering and arms trafficking in 2023.\43\
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\42\ See OCCRP, Lithuanian Tied to Money Laundering Funds
Kremlin's Church (Apr. 15, 2019), <a href="https://www.occrp.org/en/news/lithuanian-tied-to-money-laundering-funds-kremlins-church">https://www.occrp.org/en/news/lithuanian-tied-to-money-laundering-funds-kremlins-church</a>.
\43\ See OCCRP, Lithuanian Businessman Indicted for Money
Laundering, Arms Dealing Exposed by OCCRP (Nov. 27, 2023), <a href="https://www.occrp.org/en/news/lithuanian-businessman-indicted-for-money-laundering-arms-dealing-exposed-by-occrp">https://www.occrp.org/en/news/lithuanian-businessman-indicted-for-money-laundering-arms-dealing-exposed-by-occrp</a>.
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Further, MBaer has a history of facilitating illicit transactions
that support Russia's military. For example, based on public and non-
public information, MBaer facilitated payments for five companies used
to launder the proceeds of a large-scale scheme to sell stolen
Ukrainian grain and procure equipment for export to the Russian
military.\44\ MBaer facilitated almost $40 million in payments, both
before and after the scheme came to light. In another example, based on
non-public information, MBaer facilitated payments for a company likely
engaged in the unlawful procurement of microelectronics and other
electronic components to Russia. In 2023, an MBaer client shipped
microelectronics to Russian end-users, including shipments to an entity
designated by BIS. Further, MBaer continued facilitating payments for
that company years after press reporting used it as an example of how
logistics companies distort shipping information to facilitate the
import of controlled goods into Russia.
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\44\ See Talk Finance, Aleksander Galkin, the Russian grain
trader, is stealing Ukrainian grain (Oct. 11, 2023), <a href="https://www.talk-finance.co.uk/international/aleksander-galkin/">https://www.talk-finance.co.uk/international/aleksander-galkin/</a> (last
accessed Jan. 7, 2026); Problematic, Alexander Galkin: How a Russian
who received Ukrainian citizenship steals Ukrainian grain and
supplies components to the Russian army (Nov. 22, 2023), <a href="https://problematic.news/aleksandr-galkin-kak-russkij-poluchivshij-grazhdanstvo-ukrainy-voruet-ukrainskoe-zerno-i-postavlyaet-komplektuyushhie-armii-rf/">https://problematic.news/aleksandr-galkin-kak-russkij-poluchivshij-grazhdanstvo-ukrainy-voruet-ukrainskoe-zerno-i-postavlyaet-komplektuyushhie-armii-rf/</a> (last accessed Jan. 7, 2026).
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4. MBaer Profits From Facilitation of Iranian Money Laundering and
Terrorist Financing
MBaer has also provided access to the U.S. financial system to
persons providing material support to Iran-related money laundering and
terrorist financing efforts, including support to Iranian foreign
terrorist organizations (FTOs)--such as Iran's Islamic Revolutionary
Guard Corps (IRGC) and its Quds Force (IRGC-QF) \45\--and through
sanctions and export control evasion. In particular, according to non-
public information available to FinCEN, MBaer facilitated over $37
million likely in connection with an Iranian international oil
smuggling and money laundering scheme by IRGC-QF officials that
involved Turkoca Import Export Transit Co LTD (Turkoca). Specifically,
three MBaer customers remitted funds through MBaer to Turkoca, a pass-
through entity used by IRGC-QF affiliates to launder funds for
Iran.\46\ FinCEN assesses that the three MBaer customers were involved
in the money laundering scheme, given the successive, large, round
dollar wires these customers originated to Turkoca that lacked
substantive information in the ``additional details'' payment fields
and do not have an apparent legitimate

[[Page 10040]]

business purpose--red flags for money laundering that align with the
pass-through nature of Turkoca as part of the scheme.
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\45\ The Department of State has authority to designate
organizations as FTOs. Treasury's OFAC has also designated the IRGC
and IRGC-QF, pursuant to multiple sanctions authorities.
\46\ Treasury, Press Release, Treasury Targets Oil Smuggling
Network Generating Hundreds of Millions of Dollars for Qods Force
and Hizballah (May 25, 2022), <a href="https://home.treasury.gov/news/press-releases/jy0799">https://home.treasury.gov/news/press-releases/jy0799</a>.
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FinCEN also assesses that MBaer likely has facilitated, and
continues to facilitate, evasion of sanctions on Iran's oil
industry.\47\ For example, according to non-public information, MBaer
facilitated almost $27 million in multiple payments to a customer,
where the counterparties were publicly involved in Iran's oil industry.
Similarly, MBaer facilitated payments to an entity that owns an oil
tanker that was part of Iran's shadow fleet, indicating that MBaer was
facilitating a customer's purchase of illicit oil from Iran's shadow
fleet.\48\
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\47\ U.S. persons are generally prohibited from engaging in
transactions with blocked persons, as well as transactions involving
Iranian-origin petroleum, petroleum products, and petrochemical
products. See OFAC, Guidance for Shipping and Maritime Stakeholders
on Detecting and Mitigating Iranian Oil Sanctions Evasion (Apr. 16,
2025), <a href="https://ofac.treasury.gov/media/934236/download?inline">https://ofac.treasury.gov/media/934236/download?inline</a>.
\48\ Associated Press, US seized Iran oil cargo as Biden
considers easing sanctions (Mar. 10, 2022), <a href="https://apnews.com/article/russia-ukraine-putin-business-iran-bahamas-c0577bf7718055d730a3b72802c132c2">https://apnews.com/article/russia-ukraine-putin-business-iran-bahamas-c0577bf7718055d730a3b72802c132c2</a>; War Sanctions, Nostos IMO 9258014,
<a href="https://war-sanctions.gur.gov.ua/en/transport/shadow-fleet/945">https://war-sanctions.gur.gov.ua/en/transport/shadow-fleet/945</a> (last
accessed Jan. 7, 2026). FinCEN notes that prior to this activity the
tanker was linked to U.S.-sanctioned oil trades with Venezuela, and
shortly after this activity, the tanker switched to facilitating
Russian oil smuggling schemes.
---------------------------------------------------------------------------

B. The Extent to Which MBaer Is Used for Legitimate Business Purposes

In making a finding that reasonable grounds exist for concluding
that a financial institution operating outside of the United States is
of primary money laundering concern so as to authorize the imposition
of special measures, FinCEN may consider the extent to which the
financial institution is ``used for legitimate business purposes.''
\49\
---------------------------------------------------------------------------

\49\ 31 U.S.C. 5318A(c)(2)(B)(ii).
---------------------------------------------------------------------------

MBaer is a commercial bank offering a variety of financial
services, including, but not limited to, depository accounts for
individuals and businesses, funds transmission, and wealth
management.\50\ According to FINMA, MBaer is one of 278 authorized
banks and securities firms in Switzerland. MBaer's current size and
asset allocation are not publicly available. However, open-source
reporting indicates MBaer had assets of just under CHF 650 million
(approximately $717 million) as of mid-2023, making it one of
Switzerland's smaller banks.\51\ It has one direct U.S. correspondent
relationship, and at least one indirect U.S. correspondent relationship
through which it accesses the U.S. financial system.
---------------------------------------------------------------------------

\50\ MBaer, The services, <a href="https://www.mbaerbank.com/eng/the-services">https://www.mbaerbank.com/eng/the-services</a> (last accessed Jan. 7, 2026); TheBanks.eu, MBaer Merchant
Bank AG (Switzerland)--Business Summary, <a href="https://thebanks.eu/banks/19055#products">https://thebanks.eu/banks/19055#products</a> (last accessed Jan. 7, 2026).
\51\ <a href="http://finews.com">finews.com</a>, Mike Baer: Around 100 applications in two days
(Oct. 13, 2023), <a href="https://www.finews.com/news/english-news/59710-mike-baer-applications-banking-credit-suisse-interview">https://www.finews.com/news/english-news/59710-mike-baer-applications-banking-credit-suisse-interview</a> (last
accessed Jan. 7, 2026).
---------------------------------------------------------------------------

Although FinCEN does not have fulsome insight into the scope of
MBaer's legitimate activities, at least a portion of MBaer's business
activities appear legitimate. MBaer has assets of about $700 million,
while FinCEN has identified at least $100 million in illicit
transactions through MBaer since 2019. However, FinCEN assesses that
those legitimate activities do not outweigh the risks posed by abuse of
the bank's services by money launderers, as discussed above, the extent
to which MBaer facilitates the activities of illicit actors, and the
need to protect U.S. financial institutions from the money laundering
risks presented by MBaer.

C. The Extent to Which the Action Proposed by FinCEN Would Guard
Against International Money Laundering and Other Financial Crimes

In making a finding that reasonable grounds exist for concluding
that a financial institution operating outside of the United States is
of primary money laundering concern, thereby authorizing the imposition
of special measures, FinCEN may consider the extent to which such
action is ``sufficient to ensure'' that the purpose of BSA
``continue[s] to be fulfilled, and to guard against international money
laundering and other financial crimes.'' \52\ FinCEN anticipates that,
by finding that MBaer is a financial institution operating outside the
United States of primary money laundering concern and imposing special
measure five, as proposed here, U.S. financial institutions, their
foreign correspondents, and their regulators, may act to mitigate the
money laundering risks posed by transactions involving MBaer, and, that
imposing special measure five would sufficiently safeguard the U.S.,
and international, financial systems by restricting the ability of
MBaer to access the U.S. financial system.
---------------------------------------------------------------------------

\52\ 31 U.S.C. 5318A(c)(2)(B)(iii).
---------------------------------------------------------------------------

V. Proposed Special Measure

Having found that MBaer is a financial institution operating
outside of the United States that is of primary money laundering
concern, FinCEN proposes imposing a prohibition on covered financial
institutions under special measure five. Special measure five
authorizes the Secretary to prohibit or impose conditions upon the
opening or maintaining in the United States of a correspondent account
or payable-through account, if such account ``involves'' a financial
institution of primary money laundering concern.\53\ MBaer accesses the
U.S. dollar through one direct and one indirect correspondent account
with U.S. financial institutions. Thus, FinCEN has determined that
special measure five will most effectively mitigate the risks posed by
MBaer.
---------------------------------------------------------------------------

\53\ 31 U.S.C. 5318A(b)(5).
---------------------------------------------------------------------------

In proposing this special measure, FinCEN considered the factors
set forth in section 311, as set forth below,\54\ as well as the other
special measures available under section 311. And, FinCEN consulted
with representatives and staff of the Board of Governors of the Federal
Reserve System, the Office of the Comptroller of the Currency, the
Secretary of State, the Securities and Exchange Commission, the
Commodity Futures Trading Commission, the National Credit Union
Administration, the Federal Deposit Insurance Corporation, and the
Attorney General.\55\ These consultations involved obtaining
interagency views on the imposition of special measure five and the
effects that such a prohibition would have on the U.S. domestic and
international financial systems.
---------------------------------------------------------------------------

\54\ 31 U.S.C. 5318A(a)(4)(B)(i)-(iv).
\55\ See 31 U.S.C. 5318A(b)(5).
---------------------------------------------------------------------------

A. Whether Similar Action Has Been or Is Being Taken by Other Nations
or Multilateral Groups Regarding MBaer

FinCEN is aware of an investigation by another nation regarding
MBaer. That investigation has not yet resulted in an action that would
protect the U.S. financial system from the money laundering risks
presented by MBaer.

B. Whether the Imposition of Any Particular Special Measure Would
Create a Significant Competitive Disadvantage, Including Any Undue Cost
or Burden Associated With Compliance, for Financial Institutions
Organized or Licensed in the United States

While FinCEN assesses that the prohibition proposed in this NPRM
would place some cost and burden on covered financial institutions,
these burdens are neither undue nor inappropriate in view of the threat
posed by the illicit activity facilitated by MBaer.

[[Page 10041]]

MBaer provides correspondent banking services to its customers
directly through one correspondent relationship with a U.S. financial
institution, and indirectly through at least one correspondent account
that another foreign financial institution holds with U.S. financial
institutions. These accounts may be used for commercial payments, as
well as foreign exchange and money market transactions. Covered
financial institutions and transaction partners have ample opportunity
to arrange for alternative payment mechanisms in the absence of
correspondent banking relationships with MBaer.
Thus, a prohibition on correspondent banking with MBaer is expected
to impose minimal additional compliance costs for covered financial
institutions, which would most commonly involve adding MBaer to
preexisting sanctions screening and money laundering monitoring tools.
FinCEN assesses that given the risks posed by MBaer's facilitation of
money laundering, the additional burden on covered financial
institutions in preventing the opening of correspondent accounts with
MBaer, as well as conducting due diligence on foreign correspondent
account holders and notifying them of the prohibition, will be minimal
and not undue.

C. The Extent to Which the Action or the Timing of the Action Would
Have a Significant Adverse Systemic Impact on the International
Payment, Clearance, and Settlement System, or on Legitimate Business
Activities of MBaer

FinCEN assesses that imposing the proposed special measure would
have minimal impact upon the international payment, clearance, and
settlement system. MBaer is classified by FINMA as a ``category 5''
financial institution, meaning it has a small market participant and
low risk to the financial system.\56\ MBaer's assets are approximately
0.015 percent of total banking sector assets in Switzerland. As a
comparatively small financial institution responsible for a nominal
amount of transaction volume, MBaer is not a systemically important
financial institution in Switzerland, or more broadly in the regional
or global financial system. FinCEN assesses that prohibiting MBaer's
access to U.S. correspondent banking channels would not affect overall
cross-border transaction volumes. Further, a prohibition under special
measure five would not prevent MBaer from conducting legitimate
business activities in other foreign currencies, so long as a covered
financial institution is not involved.
---------------------------------------------------------------------------

\56\ FINMA, ``Categorisation of banks and securities firms,''
<a href="https://www.finma.ch/en/supervision/banks-and-securities-firms/categorisation/">https://www.finma.ch/en/supervision/banks-and-securities-firms/categorisation/</a> (last accessed Jan. 26, 2026); FINMA, ``Authorised
banks and securities firms,'' https://www.finma.ch/en/~/media/finma/
dokumente/bewilligungstraeger/pdf/beh.pdf?la=en (last accessed Jan.
26, 2026).
---------------------------------------------------------------------------

D. The Effect of the Proposed Action on United States National Security
and Foreign Policy

As described above, evidence available to FinCEN demonstrates that
MBaer serves as a significant conduit for money laundering by
Venezuelan, Russian, and Iranian illicit actors. Imposing special
measure five will: (1) close MBaer's access to the U.S. financial
system; (2) inhibit MBaer's ability to act as an illicit finance
facilitator; and (3) raise awareness of the ways illicit actors
circumvent money laundering controls and international sanctions. As a
result, U.S. national security would be enhanced by making it more
difficult for money launderers and terrorist organizations to continue
their illicit activities.

E. Consideration of Alternative Special Measures

In assessing the appropriate special measure to impose, FinCEN
considered alternatives to a prohibition on the opening or maintaining
in the United States of correspondent accounts or payable-through
accounts, including the imposition of one or more of the first four
special measures or imposing conditions on the opening or maintaining
of correspondent accounts under special measure five. Having considered
these alternatives, FinCEN assesses that, for the reasons set out
below, none of the other special measures available under section 311
or merely imposing conditions under special measures five would
appropriately address the risks posed by MBaer and the urgent need to
prevent it from accessing the U.S. financial system through
correspondent banking.
MBaer not only presents a significant money laundering risk,
particularly related to Venezuelan, Russian, and Iranian illicit
actors, but taken as a whole, MBaer's history of involvement in
laundering proceeds of illicit activities presents a heightened risk
that MBaer will continue to be used by illicit actors. Because of the
nature and extent of illicit funds transiting MBaer, any special
measure intended to mandate additional information collection would
likely be ineffective and insufficient to address the risks posed by
MBaer's continued access to the U.S. financial system. For example,
FinCEN considered special measure two, which may require domestic
financial institutions to ``obtain and retain information concerning
the beneficial ownership of any account opened or maintained in the
United States by a foreign person.'' \57\ However, FinCEN determined
that this special measure would likely be ineffective since the
concerns involving MBaer do not involve the opening or maintaining of
accounts in the United States by foreign persons. Likewise, FinCEN
considered imposing additional reporting obligations under special
measures one, three, and four, and determined that such obligations
would not be effective. For instance, the provision under special
measure one--that ``the identity and address of the participants in a
transaction or relationship, including the identity of the originator
of any funds transfer'' be collected in records and reports--could be
circumvented by the operations of shell companies, wherein the reported
identity of the originator serves to obscure the true beneficial owner
or originator,\58\ or by efforts by MBaer to hide or obscure customer
information to avoid regulatory scrutiny. Moreover, the requirements
under special measures three and four that domestic financial
institutions obtain ``with respect to each customer (and each such
representative), information that is substantially comparable to that
which the depository institution obtains in the ordinary course of
business with respect to its customers residing in the United States,''
are also likely to be ineffective for the same reasons.\59\ Indeed, in
respect of all such special measures, FinCEN is already generally aware
of the money laundering threats posed by MBaer's customer base, which
prompted this action, and merely requiring U.S. institutions to collect
additional information would impose a disproportionate compliance
burden, with no guarantee that the risks presented by MBaer would be
addressed.
---------------------------------------------------------------------------

\57\ 31 U.S.C. 5318A(b)(2).
\58\ 31 U.S.C. 5318A(b)(1)(B)(i).
\59\ 31 U.S.C. 5318A(b)(3)(B); (b)(4)(B).
---------------------------------------------------------------------------

FinCEN similarly assesses that merely imposing conditions under
special measure five would be inadequate to address the risks posed by
MBaer's activities. Special measure five enables FinCEN to impose
conditions as an alternative to a prohibition on the opening or
maintaining of correspondent accounts.\60\ Given MBaer's facilitation
of money laundering, FinCEN determined that imposing any condition
would not be an

[[Page 10042]]

effective measure to safeguard the U.S. financial system. FinCEN
assesses that the millions of dollars' worth of funds laundered through
MBaer, and the fairly limited exposure of U.S. financial institutions
to MBaer, outweigh the value in providing conditioned access to the
U.S. financial system for any purportedly legitimate business activity.
Conditions on the opening or maintaining of correspondent accounts
would likely be inefficient or, given MBaer's inadequate AML/CFT
controls, insufficient to prevent illicit financial flows through the
U.S. financial system.
---------------------------------------------------------------------------

\60\ 31 U.S.C. 5318A(b)(5).
---------------------------------------------------------------------------

In sum, FinCEN assesses that any condition or additional
recordkeeping or reporting requirement would be an ineffective or
inefficient way to safeguard the U.S. financial system from the illicit
behavior facilitated by MBaer. Such measures would not prevent MBaer
from accessing the correspondent accounts of U.S. financial
institutions, thus leaving the U.S. financial system vulnerable to
processing illicit transfers, resulting in significant national
security and money laundering risk. In addition, no recordkeeping and/
or reporting requirements or conditions would be sufficient to guard
against the risks posed by a financial institution that processes
transactions designed to obscure the transactions' true nature and are
ultimately for the benefit of illicit actors. Therefore, FinCEN has
determined that a prohibition on opening or maintaining correspondent
banking relationships is the only special measure available under
section 311 that can adequately protect the U.S. financial system from
the illicit finance risk posed by MBaer. For these reasons, and after
thorough consideration of alternate measures, FinCEN assesses that no
measures short of full prohibition on correspondent or payable-through
banking access would be sufficient to address the money laundering
risks posed by MBaer.

VI. Section-by-Section Analysis

The goal of this proposed rule is to combat and deter illicit
activity, including illicit activity involving Venezuelan, Russian, and
Iranian-affiliated money laundering and the laundering of proceeds
through MBaer, and to prevent MBaer from using the U.S. financial
system to enable illicit financial activity.

A. 1010.666(a)--Definitions

1. Definition of MBaer
The term ``MBaer'' means all subsidiaries, branches, and offices of
MBaer Merchant Bank AG operating as a financial institution in any
jurisdiction outside of the United States.
2. Definition of Correspondent Account
The term ``correspondent account'' is defined by reference to the
definition contained in 31 CFR 1010.605(c)(1)(ii). In the case of a
U.S. depository institution, this definition includes most types of
banking relationships between a U.S. depository institution and a
foreign bank that are established to provide regular services,
dealings, and other financial transactions, including a demand deposit,
savings deposit, or other transaction or asset account, and a credit
account or other extension of credit. FinCEN is using the same
definition of ``account'' for purposes of this proposed rule as is
established for depository institutions in the final rule implementing
the provisions of section 312 of the USA PATRIOT Act, requiring
enhanced due diligence for correspondent accounts maintained for
certain foreign banks.\61\ Under this definition, ``payable-through
accounts'' are a type of correspondent account.
---------------------------------------------------------------------------

\61\ See 31 CFR 1010.605(c)(2)(i).
---------------------------------------------------------------------------

In the case of securities broker-dealers, futures commission
merchants, introducing brokers in commodities, and investment companies
that are open-end companies (mutual funds), FinCEN is also using the
same definition of ``account'' for purposes of this proposed rule as
was established for these entities in the final rule implementing the
provisions of section 312 of the USA PATRIOT Act, requiring due
diligence for correspondent accounts maintained for certain foreign
banks.\62\
---------------------------------------------------------------------------

\62\ See 31 CFR 1010.605(c)(2)(ii)-(iv).
---------------------------------------------------------------------------

3. Definition of Covered Financial Institution
The term ``covered financial institution'' is defined by reference
to 31 CFR 1010.605(e)(1), the same definition used in the BSA rule (31
CFR 1010.610) requiring the establishment of due diligence programs for
correspondent accounts for foreign financial institutions. In general,
this definition includes the following:
<bullet> a bank;
<bullet> a broker or dealer in securities;
<bullet> a futures commission merchant or an introducing broker in
commodities; and
<bullet> a mutual fund.
4. Definition of Financial Institution Operating Outside of the United
States
Pursuant to 31 U.S.C. 5318A(e)(4), the term ``financial institution
operating outside of the United States'' means any business or agency
operating, in whole or in part, outside of the United States that
engages in any activity which is similar to, related to, or a
substitute for any activity in which any financial institution, as
defined in 31 U.S.C. 5312(a)(2), engages.
FinCEN is including this definition as the proposed definition of
``MBaer'' incorporates this phrase. As discussed above, 31 U.S.C. 5312
permits FinCEN, by regulation, to define as a ``financial institution''
any business or activity that engages in any activity that FinCEN
determines is an activity similar to, related to, or a substitute for
any activity in which any business defined as a ``financial
institution'' in 31 U.S.C. 5312 is authorized to engage.
5. Definition of Foreign Banking Institution
The term ``foreign banking institution'' means a bank organized
under foreign law, or an agency, branch, or office located outside the
United States of a bank. The term does not include an agent, agency,
branch, or office within the United States of a bank organized under
foreign law.
6. Definition of Subsidiary
The term ``subsidiary'' means a company of which more than 50
percent of the voting stock or an otherwise controlling interest is
owned by another company.

B. 1010.666(b)--Prohibition on Accounts and Due Diligence Requirements
for Covered Financial Institutions

1. Prohibition on Opening or Maintaining Correspondent Accounts
Proposed section 1010.666(b)(1) prohibits covered financial
institutions from opening or maintaining in the United States a
correspondent account for, or on behalf of, MBaer.
2. Prohibition on Use of Correspondent Accounts Involving MBaer
Proposed section 1010.666(b)(2) requires covered financial
institutions to take reasonable steps not to process a transaction for
the correspondent account of a foreign banking institution in the
United States if such a transaction involves MBaer. Such reasonable
steps are described in 1010.666(b)(3), which sets forth the special due
diligence requirements a covered financial institution would be
required to take when it knows or has reason to believe that a
transaction involves MBaer.

[[Page 10043]]

3. Special Due Diligence for Correspondent Accounts
As a corollary to the prohibition set forth in proposed section
1010.666(b)(1) and (2), proposed section 1010.666(b)(3) requires
covered financial institutions to apply special due diligence to all of
their foreign correspondent accounts that is reasonably designed to
guard against such accounts being used to process transactions
involving MBaer. As part of that special due diligence, covered
financial institutions would be required to notify those foreign
correspondent account holders that the covered financial institutions
know or have reason to believe provide services to MBaer, that such
correspondents may not provide MBaer with access to the correspondent
account maintained at the covered financial institution. A covered
financial institution may satisfy this notification requirement using
the following notice:
Notice: Pursuant to U.S. regulations issued under Section 311 of
the USA PATRIOT Act, see 31 CFR 1010.666, we are prohibited from
opening or maintaining in the United States a correspondent account
for, or on behalf of, MBaer. The regulations also require us to notify
you that you may not provide MBaer, including any of its subsidiaries,
branches, and offices access to the correspondent account you hold at
our financial institution. If we become aware that the correspondent
account you hold at our financial institution has processed any
transactions involving MBaer, including any of its subsidiaries,
branches, and offices, we will be required to take appropriate steps to
prevent such access, including terminating your account.
The purpose of the notice requirement is to aid cooperation with
correspondent account holders in preventing transactions involving
MBaer from accessing the U.S. financial system. FinCEN does not require
or expect a covered financial institution to obtain a certification
from any of its correspondent account holders that access will not be
provided to comply with this notice requirement.
Methods of compliance with the notice requirement could include,
for example, transmitting a notice by mail, fax, or email. The notice
should be transmitted whenever a covered financial institution knows or
has reason to believe that a foreign correspondent account holder
provides services to MBaer.
Special due diligence also includes implementing risk-based
procedures designed to identify any use of correspondent accounts to
process transactions involving MBaer. A covered financial institution
would be expected to apply an appropriate screening mechanism to
identify a funds transfer order that on its face listed MBaer as the
financial institution of the originator or beneficiary, or otherwise
referenced MBaer in a manner detectable under the financial
institution's normal screening mechanisms. An appropriate screening
mechanism could be the mechanisms used by a covered financial
institution to comply with various legal requirements, such as
commercially available software programs used to comply with the
economic sanctions programs administered by the OFAC.
4. Recordkeeping and Reporting
Proposed section 1010.666(b)(4) clarifies that the proposed rule
does not impose any reporting requirement upon any covered financial
institution that is not otherwise required by applicable law or
regulation. A covered financial institution must, however, document its
compliance with the notification requirement described above in section
1010.666(b)(3).

VII. Request for Comments

FinCEN is requesting comments for 30 days after the publication of
this NPRM. Given MBaer's consistent and longstanding ties to
facilitating transactions for illicit actors, FinCEN assesses that a
30-day comment period for this NPRM strikes an appropriate balance
between ensuring sufficient time for notice to the public and
opportunity for comment on the proposed rule, while minimizing undue
national security risk posed to the U.S. financial system in processing
illicit transfers. FinCEN invites comments on all aspects of the
proposed rule, including the following specific matters:
1. FinCEN's proposal of a prohibition under the fifth special
measure under 31 U.S.C. 5318A(b), as opposed to imposing special
measures one through four or imposing conditions under the fifth
special measure;
2. The form and scope of the notice to certain correspondent
account holders that would be required under the rule; and
3. The appropriate scope of the due diligence requirements in this
proposed rule.

VIII. Executive Order 14294

Section 5 of Executive Order 14294 directs that all future notices
of proposed rulemaking (NPRMs) and final rules published in the Federal
Register, the violation of which may constitute criminal regulatory
offenses, should include a statement identifying that the rule or
proposed rule is a criminal regulatory offense and the authorizing
statute.\63\ Executive Order 14294 directs agencies to draft this
statement in consultation with the Department of Justice.
---------------------------------------------------------------------------

\63\ Executive Order 14294, ``Fighting Overcriminalization in
Federal Regulations'' 90 FR 20367 (issued May 9, 2025; published May
14, 2025), <a href="https://www.federalregister.gov/executive-order/14294">https://www.federalregister.gov/executive-order/14294</a>.
---------------------------------------------------------------------------

Executive Order 14294 further directs that the regulatory text of
all NPRMs and final rules with criminal consequences published in the
Federal Register after May 9, 2025 should explicitly state a mens rea
requirement for each element of a criminal regulatory offense,
accompanied by citations to the relevant provisions of the authorizing
statute.
Willful violations of the proposed regulations set forth in this
proposed rule may be subject to criminal penalties pursuant to 31
U.S.C. 5322 and regulations promulgated in 31 CFR Chapter X. The
statutory authority for criminal liability requires a mens rea of
willfulness as an element pursuant to 31 U.S.C. 5322(a) and 31 U.S.C.
5322(b). FinCEN's existing regulation, 31 CFR 1010.840, that sets out
criminal penalties for violations of regulations promulgated in 31 CFR
Chapter X also includes a mens rea of willfulness. In drafting this
statement, FinCEN has consulted with the Department of Justice.

IX. Regulatory Impact Analysis

FinCEN has analyzed this proposed rule under Executive Orders
12866, 13563 the Regulatory Flexibility Act,\64\ the Unfunded Mandates
Reform Act,\65\ and the Paperwork Reduction Act.\66\
---------------------------------------------------------------------------

\64\ 5 U.S.C. 603.
\65\ 2 U.S.C. 1532.
\66\ 44 U.S.C. 3507(a)(1)(D).
---------------------------------------------------------------------------

As discussed above, the intended effects of the imposition of
special measure five with respect to MBaer are twofold. The rule is
expected to: (1) combat and deter money laundering in facilitation of
Venezuelan, Russian, and Iranian illicit financing associated with
MBaer; and (2) prevent MBaer from using the U.S. financial system to
enable illicit financial activity. In the analysis below, FinCEN
discusses the economic effects that are expected to accompany adoption
of the rule as proposed and assesses such expectations in more granular
detail. This discussion includes an explanation of how FinCEN's
assumptions and methodological choices have influenced FinCEN's
conclusions. The public is

[[Page 10044]]

invited to comment on all aspects of FinCEN's practice.\67\
---------------------------------------------------------------------------

\67\ See Section VII; see also Section IX.D.
---------------------------------------------------------------------------

A. Executive Orders

Executive Orders 12866 and 13563 direct agencies to assess costs
and benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). Executive Order 13563
emphasizes the importance of quantifying both costs and benefits,
reducing costs, harmonizing rules, and promoting flexibility.
It has been determined that this proposed rule is not a significant
regulatory action under section 3(f) of Executive Order 12866.
Accordingly, a regulatory impact analysis is not required.

B. Regulatory Flexibility Act

When an agency issues a rulemaking proposal, the Regulatory
Flexibility Act (RFA) requires the agency to ``prepare and make
available for public comment an initial regulatory flexibility
analysis'' that will ``describe the impact of the proposed rule on
small entities.'' \68\ However, section 605 of the RFA allows an agency
to certify a rule, in lieu of preparing an analysis, if the proposed
rulemaking is not expected to have a significant economic impact on a
substantial number of small entities.
---------------------------------------------------------------------------

\68\ 5 U.S.C. 603(a).
---------------------------------------------------------------------------

The population of affected covered financial institutions under the
proposed rule is limited to those financial institutions that maintain
foreign correspondent accounts. FinCEN is not in possession of any
data, studies, or qualitative evidence that any such covered financial
institution meets the applicable definitional criteria to be deemed a
``small entity'' under the RFA. Moreover, FinCEN assesses that if any
covered financial institution were a small entity, the changes in
activity necessary to comply with the proposed rule would be unlikely
to have a significant economic impact on such entity.
Under the proposed special measure, covered financial institutions
would be prohibited from opening or maintaining correspondent accounts
for, or on behalf of, MBaer. As discussed above in Section V.B, FinCEN
has identified fewer than five such accounts. The imposition of the
proposed special measure would therefore be more likely to prevent
future correspondent accounts from being opened with small entities
than require activity be undertaken with respect to currently
maintained accounts. Given the relatively small size of MBaer as a
financial institution operating outside of the United States and the
current absence of account opening activity, the economic impact on
small entities of continuing to forgo account opening is expected to be
minimal.
Covered financial institutions would also be required to take
reasonable measures to detect and prevent use of their correspondent
accounts to process transactions involving MBaer. Neither set of newly
required activities should introduce significant incremental burdens
relative to current obligations and ongoing diligence activities. For
example, all U.S. persons, including U.S. financial institutions, must
comply with OFAC sanctions, and covered U.S. financial institutions
generally have suspicious activity reporting requirements and systems
in place to screen transactions to comply with OFAC sanctions and
section 311 special measures administered by FinCEN. The systems that
U.S. financial institutions have in place to comply with these
requirements can easily be modified to adapt to this proposed rule.
Thus, the special due diligence that would be required under the
proposed rule--i.e., preventing the processing of transactions
involving MBaer and the transmittal of notification to certain
correspondent account holders--is not expected to require a significant
change in due diligence activities for small U.S. financial
institutions. For these reasons, FinCEN certifies that the proposals
contained in this rulemaking are not expected to have a significant
impact on a substantial number of small businesses.
FinCEN invites comments from members of the public who believe
there would be a significant economic impact on small entities from the
imposition of a prohibition under special measure five regarding MBaer.

C. Unfunded Mandates Reform Act

Section 202 of the Unfunded Mandates Reform Act of 1995 \69\
(Unfunded Mandates Reform Act), requires that an agency prepare a
budgetary impact statement before promulgating a rule that may result
in expenditure by the state, local, and tribal governments, in the
aggregate, or by the private sector, of $100 million or more in any one
year, adjusted for inflation.\70\ If a budgetary impact statement is
required, section 202 of the Unfunded Mandates Reform Act also requires
an agency to identify and consider a reasonable number of regulatory
alternatives before promulgating a rule.\71\
---------------------------------------------------------------------------

\69\ 2 U.S.C. 1532, Public Law 104-4 (Mar. 22, 1995).
\70\ Id.
\71\ Id.
---------------------------------------------------------------------------

FinCEN has determined that this proposed rule would not result in
expenditures by state, local, and tribal governments in the aggregate,
or by the private sector, of an annual $100 million or more, adjusted
for inflation ($187 million).\72\ Accordingly, FinCEN has not prepared
a budgetary impact statement or considered the regulatory alternatives
outlined in Section V.E above within the framework of the Unfunded
Mandates Reform Act.
---------------------------------------------------------------------------

\72\ The Unfunded Mandates Reform Act requires an assessment of
mandates that will result in an annual expenditure of USD 100
million or more, adjusted for inflation. The U.S. Bureau of Economic
Analysis reports the annual value of the gross domestic product
deflator for calendar year 1995, the year of the Unfunded Mandates
Reform Act, as 66.939, and as 125.428 for the calendar year 2024,
the most recent available. See U.S. Bureau of Economic Analysis,
Table 1.1.9. Implicit Price Deflators for Gross Domestic Product,
<a href="https://www.bea.gov/itable/">https://www.bea.gov/itable/</a> (last accessed Oct. 3, 2025). Thus, the
inflation-adjusted estimate for USD 100 million is 125.428/66.939 x
100 million = USD 187.377 million.
---------------------------------------------------------------------------

D. Paperwork Reduction Act

The recordkeeping requirements contained in this proposed rule that
qualify as ``collections of information'' under the Paperwork Reduction
Act of 1995 (PRA) will be submitted to the Office of Management and
Budget (OMB) for review in accordance with the PRA.\73\ Under the PRA,
an agency may not conduct or sponsor a collection of information unless
it displays a valid control number assigned by the OMB.\74\ Written
comments and recommendations for the proposed prohibition can be
submitted by visiting <a href="http://www.reginfo.gov/public/do/PRAMain">www.reginfo.gov/public/do/PRAMain</a>. Find this
particular document by selecting ``Currently under Review--Open for
Public Comments'' or by using the search function. Comments are welcome
and must be received by April 1, 2026. In accordance with

[[Page 10045]]

requirements of the PRA and its implementing regulations, 5 CFR part
1320, the following information concerning the collection of
information as required by 31 CFR 1010.666 is presented to assist those
persons wishing to comment on the information collections.
---------------------------------------------------------------------------

\73\ See 44 U.S.C. 3507(a)(1)(D). The PRA defines a ``collection
of information'' as '' the obtaining, causing to be obtained,
soliciting, or requiring the disclosure to third parties or the
public, of facts or opinions by or for an agency, regardless of form
or format, calling for either (i) answers to identical questions
posed to, or identical reporting or recordkeeping requirements
imposed on, ten or more persons, other than agencies,
instrumentalities, or employees of the United States; or (ii)
answers to questions posed to agencies, instrumentalities, or
employees of the United States which are to be used for general
statistical purposes[.]'' See 44 U.S.C. 3502(3).
\74\ 44 U.S.C. 3507(a)(3).
---------------------------------------------------------------------------

The provisions in this proposed rule pertaining to the collection
of information can be found in sections 1010.666(b)(3)(i)(A) and
1010.666(b)(4). The notification requirement in section
1010.666(b)(3)(i)(A) is intended to aid cooperation from foreign
correspondent account holders in preventing transactions involving
MBaer from being processed by the U.S. financial system. The
information required to be maintained by section 1010.666(b)(4) would
be used by federal agencies and certain self-regulatory organizations
to verify compliance by covered financial institutions with the
notification requirement in section 1010.666(b)(3)(i)(A). The
collection of information would be mandatory.
Frequency: As required.
Description of Affected Financial Institutions: Only those covered
financial institutions defined in section 1010.666(a)(3) that are
engaged in correspondent banking with, or processing transactions
potentially involving, MBaer as defined in section 1010.666(b)(1) and
(2) are expected to incur incremental economic effects.
Estimated Number of Potential Respondents: Approximately
15,710.\75\
---------------------------------------------------------------------------

\75\ This estimate is informed by public and non-public data
sources regarding both an expected maximum number of entities that
may be affected and the number of active, or currently reporting,
registered financial institutions.

Table 1--Estimates of Covered Financial Institutions by Type
------------------------------------------------------------------------
Financial institution type Number of entities
------------------------------------------------------------------------
Banks with a federal functional regulator (FFR) \b\ 8,995
\a\..............................................
Banks without an FFR \c\.......................... \d\ 395
Broker-dealers in securities (broker-dealers) \e\. \f\ 3,320
Open end mutual funds \g\......................... \h\ 2,036
Futures commission merchants \i\.................. \j\ 65
Introducing brokers in commodities \k\............ \l\ 899
------------------------------------------------------------------------
\a\ See 31 CFR 1010.100(t)(1); see also 31 CFR 1010.100(d).
\b\ Bank data is as of January 17, 2025, from Federal Deposit Insurance
Corporation BankFind, <a href="https://banks.data.fdic.gov/bankfind-suite/bankfind">https://banks.data.fdic.gov/bankfind-suite/bankfind</a> bankfind. Credit union data is as of September 2024 from the National
Credit Union Administration Quarterly Data Summary Reports, <a href="https://ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data-summary-reports">https://ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data-summary-reports</a>.
\c\ 31 CFR 1020.210(b).
\d\ The Board of Governors of the Federal Reserve System Master Account
and Services Database contains data on financial institutions that
utilize Reserve Bank financial services, including those with no
federal regulator. FinCEN used this data to identify 395 banks and
credit unions utilizing Reserve Bank financial services with no
federal regulator. See Board of Governors of the Federal Reserve
System, Master Account and Services Database (Dec. 19, 2025), <a href="https://www.federalreserve.gov/paymentsystems/master-account-and-services-database-existing-access.htm">https://www.federalreserve.gov/paymentsystems/master-account-and-services-database-existing-access.htm</a>.
\e\ 31 CFR 1010.100(t)(2).
\f\ According to the Securities and Exchange Commission (SEC), there are
3,320 broker-dealers as of March 2025 from the website ``Company
Information About Active Broker-Dealers,'' <a href="https://www.sec.gov/foia-services/frequently-requested-documents/company-information-about-active-broker-dealers">https://www.sec.gov/foia-services/frequently-requested-documents/company-information-about-active-broker-dealers</a>.
\g\ See 31 CFR 1010.100(t)(10); see also 31 CFR 1010.100(gg).
\h\ According to the SEC, in 2024 there were 2,036 open-end registered
investment companies that report on Form N-CEN. SEC, ``Form N-CEN Data
Sets,'' <a href="https://www.sec.gov/dera/data/form-ncen-data-sets">https://www.sec.gov/dera/data/form-ncen-data-sets</a>.
\i\ 31 CFR 1010.100(t)(8).
\j\ According to the Commodity Futures Trading Commission (CFTC), there
are 65 futures commission merchants as of November 30, 2024. See CFTC,
``Financial Data for FCMs,'' <a href="https://www.cftc.gov/MarketReports/financialfcmdata/index.htm">https://www.cftc.gov/MarketReports/financialfcmdata/index.htm</a>.
\k\ 31 CFR 1010.100(t)(9).
\l\ According to the National Futures Association (NFA), there are 899
introducing brokers in commodities as of Dec. 31, 2024 from website
``NFA Membership Totals,'' <a href="https://www.nfa.futures.org/registration-membership/membership-and-directories.html">https://www.nfa.futures.org/registration-membership/membership-and-directories.html</a>.

Estimated Number of Expected Respondents: Approximately 127.\76\
---------------------------------------------------------------------------

\76\ While this regulation applies to all covered institutions
described in Table 1, in practice the burden would only be imposed
on select institutions that maintain correspondent accounts for
foreign banks. Table 2 below presents an estimate of this
subpopulation of banks, brokers or dealers in securities, mutual
funds, futures commission merchants, and introducing brokers in
commodities based on data from the most recent calendar year end.

Table 2--Estimates of Affected Financial Institutions by Type
------------------------------------------------------------------------
Financial institution type Number of entities
------------------------------------------------------------------------
Banks with a FFR.................................. \a\ 60
Banks without a FFR............................... \b\ 17
Broker-dealers.................................... \c\ 26
Open end mutual funds............................. \d\ 16
Futures commission merchants...................... \e\ 1
Introducing brokers in commodities................ \f\ 7
------------------------------------------------------------------------
\a\ Data are from the Federal Financial Institution Examination Council
Central Data Repository for Reports of Condition and Income (Call
Reports) and Uniform Bank Performance Reports (UBPRs), available for
most Federal Deposit Insurance Corporation-insured institutions. Using
this source of data, FinCEN determines that as of Q3 2024,
approximately 60 banks (as defined by FinCEN regulations, see 31 CFR
1010.100(d)) would be affected by the rules covered in this notice in
any given year. Specifically, as of Q3 2024, there were approximately
60 banks that reported non-zero values for deposit liabilities of
banks in foreign countries. Deposit liabilities in a foreign country
is an indication that a bank maintains correspondent accounts with a
foreign financial institution.

[[Page 10046]]

\b\ The Board of Governors of the Federal Reserve System Master Account
and Services Database contains data on financial institutions that
utilize Reserve Bank financial services, including those with no
federal regulator. FinCEN used this data to identify an additional 17
international banking entities with no federal regulator and that do
not file Call Reports, but that are also likely to maintain
correspondent accounts with a foreign financial institution.
\c\ Broker-dealers, unless they are publicly traded, are not required to
make reports indicating whether they have foreign correspondent
accounts or hold foreign deposits. FinCEN reviewed financial statement
data from 10-Q and 6-K filings with the SEC and identified nine
publicly traded broker-dealers with U.S. operations that reported
foreign deposits. FinCEN also examined SARs filed by broker-dealers in
2024 to identify another two non-publicly traded broker-dealers who
appeared likely to be maintaining foreign deposits. However, because
many broker-dealers are not publicly traded and did not file SARs,
FinCEN conservatively estimates that the proportion of broker-dealers
with foreign correspondent accounts will be similar to the proportion
for banks (approximately 0.8%). 0.8% of 3,320 active broker-dealers is
approximately 26 broker-dealers assumed to have foreign correspondent
accounts.
\d\ Mutual funds, futures commission merchants, and introducing brokers
in commodities generally use intermediary U.S. banks to move and
maintain client deposits and funds for investment. Therefore, it is
unlikely that many of these institutions will maintain direct
correspondent accounts with foreign financial institutions outside of
their existing upstream banking relationships. However, because these
institutions may in some cases receive deposits from, make payments or
other disbursements, or otherwise transact directly with foreign
financial institutions, FinCEN conservatively estimates that the
proportion of mutual funds with foreign correspondent accounts will be
similar to the proportion for banks (approximately 0.8%). 0.8% of
2,036 active mutual funds is approximately 16 mutual funds assumed to
have foreign correspondent accounts.
\e\ 0.8% of 65 active futures commission merchants is approximately one
futures commission merchant assumed to have foreign correspondent
accounts.
\f\ 0.8% of 899 active introducing brokers in commodities is
approximately seven introducing brokers in commodities assumed to have
foreign correspondent accounts.

Estimated Average Annual Burden in Hours per Affected Financial
Institution: Imposing special measure five requirements as described in
this proposed rule is expected to result in a new, incremental
recordkeeping burden on certain covered financial institutions as
described above. Each anticipated component of this is outlined below.
Each affected covered financial institution is expected to incur a
recordkeeping burden associated with preparing and retaining the
materials necessary to demonstrate compliance with the proposed
requirements. This is expected to include records related to:
A. Documenting the reasonable steps the financial institution
undertakes to ensure no transactions involving MBaer are processed for
a foreign correspondent account, including:
1. Any investigative activities undertaken when the financial
institution knows or has reason to believe that a foreign bank's
correspondent account has been or is being used to process transactions
involving MBaer.
2. Any subsequent activities undertaken to prevent such access,
including, where necessary, termination of the correspondent account.
B. Notifying, and documenting that the financial institution has
provided notice to, foreign correspondent account holders that the
financial institution knows or has reason to believe provide services
to MBaer, informing such correspondents that they may not provide MBaer
with access to the correspondent account maintained at the financial
institution.
C. Documenting the reasonable steps it took with respect to special
due diligence requirements, including but not limited to, the reasoning
that informed decisions to adopt (or not adopt) new measures adding to
its existing risk-based approach, and those new measures, if adopted.
The estimated average annual burden associated with the collection
of information in this proposed rule is, in total, one business day, or
eight hours per affected financial institution.
Estimated Total Annual Burden in Year One: Approximately 1,016
hours.\77\
---------------------------------------------------------------------------

\77\ 127 expected respondents multiplied by eight hours per
respondent equals 1,016 total annual burden hours.
---------------------------------------------------------------------------

Estimated Total Annual Cost in Year One: Approximately
$121,920.\78\
---------------------------------------------------------------------------

\78\ The wage rate applied here is a general composite hourly
wage ($84.55), scaled by a private-sector benefits factor of 1.42
($120.07 = $84.55 x 1.42), that incorporates the mean wage data
(available for download at <a href="https://www.bls.gov/oes/tables.htm">https://www.bls.gov/oes/tables.htm</a>, ``May
2023--National industry-specific and by ownership'') associated with
the six occupational codes (11-1010: Chief Executives; 11-3021:
Computer and Information Systems Managers; 11-3031: Financial
Managers; 13-1041: Compliance Officers; 23-1010: Lawyers and
Judicial Law Clerks; 43-3099: Financial Clerks, All Other) for each
of the nine groupings of NAICS industry codes that FinCEN determined
are most directly comparable to its eleven categories of covered
financial institutions as delineated in 31 CFR parts 1020 to 1030.
The benefit factor is 1 plus the benefit/wages ratio, where as of
June 2023, Total Benefits = 29.4 and Wages and salaries = 70.6
(29.4/70.6 = 0.42) based on the private industry workers series data
downloaded from <a href="https://www.bls.gov/news.release/archives/ecec_09122023.pdf">https://www.bls.gov/news.release/archives/ecec_09122023.pdf</a> (accessed Dec. 22, 2024). Given that many
occupations provide benefits beyond cash wages (e.g., insurance,
paid leave), the private sector benefit is applied to reflect the
total cost to the employer. 1,016 total annual burden hours
multiplied by $120 per hour equals a total annual cost of $121,920.
---------------------------------------------------------------------------

In subsequent years, FinCEN estimates that the average annual
burden associated with the collection of information would be
significantly reduced.\79\ FinCEN expects that the ongoing burden of
compliance with FinCEN special measures would primarily accrue in
connection with the opening of new foreign correspondent accounts, at
which point a covered financial institution would need to ensure that
new account holders receive information on entities subject to special
measures and agree not to conduct transactions on their behalf. FinCEN
has previously estimated that financial institutions that maintain
foreign correspondent accounts will open an average of 10 new accounts
per year.\80\ FinCEN expects the time burden of special measure
compliance associated with these new accounts would not exceed 15
minutes (0.25 hours) per affected financial institution.
---------------------------------------------------------------------------

\79\ See discussion of how compliance with the proposed rule is
expected to be integrated into covered financial institutions'
broader OFAC sanctions and 311 special measures compliance
activities at Section IX.B.
\80\ See FinCEN, Renewal Without Change of Prohibition on
Correspondent Accounts for Foreign Shell Banks; Records Concerning
Owners of Foreign Banks and Agents for Service of Legal Process, 90
FR 21987, 21994 (May 22, 2025), <a href="https://www.federalregister.gov/d/2025-09162/p-134">https://www.federalregister.gov/d/2025-09162/p-134</a>.
---------------------------------------------------------------------------

Table 3 presents a summary of FinCEN's estimates of PRA Burden as
expected to accrue during the first three years in which the rule is
effective and provides a basis for the expected average annual costs as
estimated over the same time horizon.

[[Page 10047]]

Table 3--PRA Three-Year Pro Forma Burden Estimates
----------------------------------------------------------------------------------------------------------------
Number of Hours per Total burden
Year respondents respondent hours
----------------------------------------------------------------------------------------------------------------
1...................................................... 127 8.00 1,016.00
2...................................................... 127 0.25 31.75
3...................................................... 127 0.25 31.75
Average................................................ 127 2.83 359.83
----------------------------------------------------------------------------------------------------------------

Estimated Three-Year Average Aggregate Annual Burden: Approximately
360 hours on average, per year.\81\
---------------------------------------------------------------------------

\81\ This estimate is the average of 1,016 expected burden hours
in year one of implementation and 31.75 hours in years two and
three, respectively, rounded to the nearest whole hour.
---------------------------------------------------------------------------

Estimated Three-Year Average Aggregate Annual Cost: Approximately
$43,225.20.\82\
---------------------------------------------------------------------------

\82\ An average annual burden over years one through three of
360 hours multiplied by $120.07 per hour equals an average annual
cost of $43,225.20.
---------------------------------------------------------------------------

FinCEN invites comments on: (1) whether the proposed collection of
information found in section 1010.666(b)(4) is necessary for the proper
performance of the mission of FinCEN, including whether the information
would have practical utility; (2) the accuracy of FinCEN's estimate of
the burden of the proposed collection of information; (3) ways to
enhance the quality, utility, and clarity of the information required
to be maintained; (4) ways to minimize the burden of the required
collection of information, including through the use of automated
collection techniques or other forms of information technology; and (5)
estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to report the information.

X. Regulatory Text

List of Subjects in 31 CFR Part 1010

Administrative practice and procedure, Banks, Banking, Brokers,
Crime, Foreign banking, Terrorism.

Authority and Issuance

For the reasons set forth in the preamble, FinCEN proposes amending
31 CFR part 1010 as follows:

PART 1010--GENERAL PROVISIONS

0
1. The authority citation for part 1010 continues to read as follows:

``Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314,
5316-5336; title III, sec. 314, Pub. L. 107-56, 115 Stat. 307; sec.
2006, Pub. L. 114-41, 129 Stat. 458-459; sec. 701 Pub. L. 114-74,
129 Stat. 599; sec. 6403, Pub. L. 116-283, 134 Stat. 3388.''

0
2. Add 1010.666 to read as follows:

1010.666 Special measures regarding MBaer.

(a) Definitions. For purposes of this section, the following terms
have the following meanings.
(1) MBaer. The term ``MBaer'' means all subsidiaries, branches, and
offices of MBaer Merchant Bank AG, a financial institution operating
outside of the United States.
(2) Correspondent account. The term ``correspondent account'' has
the same meaning as provided in 1010.605(c)(l)(ii).
(3) Covered financial institution. The term ``covered financial
institution'' has the same meaning as provided in 1010.605(e)(1).
(4) Financial institution operating outside of the United States.
The term ``financial institution operating outside of the United
States'' means any business or agency operating, in whole or in part,
outside of the United States that engages in any activity which is
similar to, related to, or a substitute for any activity in which any
financial institution, as defined in 31 U.S.C. 5312(a)(2), engages.
(5) Foreign banking institution. The term ``foreign banking
institution'' means a bank organized under foreign law, or an agency,
branch, or office located outside the United States of a bank. The term
does not include an agent, agency, branch, or office within the United
States of a bank organized under foreign law.
(6) Subsidiary. The term ``subsidiary'' means a company of which
more than 50 percent of the voting stock or an otherwise controlling
interest is owned by another company.
(b) Prohibition on accounts and due diligence requirements for
covered financial institutions.
(1) Prohibition on opening or maintaining correspondent accounts
for MBaer. A covered financial institution shall not open or maintain
in the United States a correspondent account for, or on behalf of,
MBaer.
(2) Prohibition on processing transactions involving MBaer. A
covered financial institution shall take reasonable steps not to
process a transaction for the correspondent account in the United
States of a foreign banking institution if such a transaction involves
MBaer.
(3) Special due diligence of correspondent accounts to prohibit
transactions.
(i) A covered financial institution shall apply special due
diligence to its foreign correspondent accounts that is reasonably
designed to guard against their use to process transactions involving
MBaer. At a minimum, that special due diligence must include:
(A) Notifying those foreign correspondent account holders that the
covered financial institution knows or has reason to believe provide
services to MBaer that such correspondents may not provide MBaer with
access to the correspondent account maintained at the covered financial
institution; and
(B) Taking reasonable steps to identify any use of its foreign
correspondent accounts by MBaer, to the extent that such use can be
determined from transactional records maintained in the covered
financial institution's normal course of business.
(ii) A covered financial institution shall take a risk-based
approach when deciding what, if any, other due diligence measures it
reasonably must adopt to guard against the use of its foreign
correspondent accounts to process transactions involving MBaer.
(iii) A covered financial institution that knows or has reason to
believe that a foreign bank's correspondent account has been or is
being used to process transactions involving MBaer shall take all
appropriate steps to further investigate and prevent such access,
including the notification of its correspondent account holder under
paragraph (b)(3)(i)(A) of this section and, where necessary,
termination of the correspondent account.
(4) Recordkeeping and reporting.
(i) A covered financial institution is required to document its
compliance with the notification requirement set forth in this section.
(ii) Nothing in paragraph (b) of this section shall require a
covered financial institution to report any information not otherwise
required to be reported by law or regulation.

[[Page 10048]]

Dated: February 26, 2026.
Andrea M. Gacki,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2026-04033 Filed 2-27-26; 8:45 am]
BILLING CODE 4810-02-P

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