This Advisory Note is produced by the Australian Sanctions Office (ASO) and the Australian Transaction Reports and Analysis Centre (AUSTRAC) to inform the regulated community of a developing issue presenting significant sanctions and AML/CTF risk. It provides a summary of relevant sanctions laws but does not cover all possible sanctions risks. Users should consider all applicable sanctions measures and seek independent legal advice. This document should not be used as a substitute for legal advice. Users are responsible for ensuring compliance with Australian sanctions laws.

Iran's Shadow Banking Network

Iran's access to the global banking system (including SWIFT and correspondent banking) has been significantly reduced by sanctions. Iranian shadow banking usually refers to a parallel banking system in which true customers are hidden or distanced from the regulated banking system. It is designed to move money, facilitate trade and access foreign currency in a manner that circumvents international sanctions. These networks pose compliance and reputational risks for global banks and traders that may engage with them unknowingly.

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