Money laundering in Iran

Money laundering in Iran has developed following decades of international sanctions that have cut Iran off from the formal global financial system, forcing Tehran to develop sophisticated money laundering and sanctions-evasion networks to sustain its economy and fund its regional activities.

From early U.S. terror-finance sanctions in the 1980s to U.N. and Western nuclear sanctions in the 2000s, Iran has faced intense economic restrictions. In response, Iranian state entities and their partners resorted to "criminal money laundering techniques, moving Iran's oil and money under false names and pretenses," as a former U.S. Treasury official described.

Over time, Tehran has built a global shadow financial system, an illicit network of shell companies, proxy banks, and money exchangers, that helps it bypass banking controls and move funds worldwide.

International watchdogs have long flagged Iran's financial system for its opacity. The Financial Action Task Force (FATF) labels Iran a "high-risk" jurisdiction with "significant strategic deficiencies" in countering money laundering and terrorist financing. In fact, since 2020 the FATF has called for member states to apply enhanced due diligence and even countermeasures against Iranian illicit finance. U.S. authorities have similarly designated Iran's entire jurisdiction as a "primary money laundering concern." Such designations reflect how deeply sanctions evasion tactics are embedded in Iran's domestic and international financial operations.