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William G. Rich

Iran Is a Threat to the Banking System

As sanctions start to bite, the regime is likely to renew its money-laundering efforts. It may have help from hackers.

Keep it clean.

Keep it clean.

Photographer: Haidar Hamdani/AFP/Getty Images

At many banks, Nov. 5 will be a scary day. That’s when broad U.S. sanctions are set to be re-imposed on Iran, thereby placing new pressure on its struggling economy and increasing the regime’s desperation for hard currency. A crucial side effect of this effort has gotten too little attention: Iran will likely attempt to skirt these sanctions through cyber-enabled money laundering — and banks will be a prime target.

Cyber-enabled money laundering is a fairly simple concept. Hackers use a bank’s computer system to execute a prohibited financial transaction by altering critical information or disabling anti-money laundering controls. It’s effective because it’s subtle: One need only disguise the illicit purpose or sanctioned participant of an otherwise allowable transaction.