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The USA have threatened extraterritorial financial sanctions for EU entities which do business with Iran (see the link for how it works and further resources, including relevant USA laws). The EU's proposed countermeasures will be announced tomorrow.

Suppose I'm an EU person or entity, I don't have any business in USA and I only or mostly conduct transactions in Euro.

To minimise the risk of disruption, I'd like to gradually move my and my customers' transactions, assets, credit lines etc. to whichever of my banks is least exposed to sanctions. What factors should I check?

I've thought of checking whether my bank has:

  • any USA subsidiary or participation;
  • accounts in USD;
  • security accounts which trade in USA exchanges;
  • specific services for USD/EUR conversion or other currency services which might go through private entities in USA.

I've checked the BIS (Bank of International Settlements) and I found some information on the mechanisms and amounts at play, but no bank-specific information: Non-US banks' claims on the Federal Reserve; Distinguishing global dollar reserves from official holdings in the United States.

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  • Does Europe not have an analogue to our FDIC? Cause frankly, i wouldn't care if the rest of the world levied sanctions against my bank -- my money's covered.
    – cHao
    May 16, 2018 at 22:46
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    @cHao deposites are insured up to 100 k€ per account, but that's really not the problem.
    – Nemo
    May 17, 2018 at 3:53
  • So what kind of "disruption" are you worried about? And why aren't you asking about business in/with Iran too (which is the one thing that would trigger sanctions in the first place)?
    – cHao
    May 17, 2018 at 12:55
  • @cHao There is more information about extraterritorial sanctions on the first article I linked. This question is about how to choose an EU bank to follow EU law in EU.
    – Nemo
    May 17, 2018 at 14:14

1 Answer 1

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Stick to local credit unions and small banks. Large Banks generally have global presence in some form and shape.

Even if worst things happen, the Banks in Europe will loose Banking license in US, meaning they will have quite a bit of assets frozen or may take a while to get back ... this can cause financial hardship to the EU Banks, however if there is a collapse of EU Banks in such situation; the EU Central Bank will step in and provide some relief.

In short; this shouldn't affect individuals or small business much.

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  • Perhaps, but I don't know. Apparently a source of concern is «access to the SWIFT international bank payments messaging system» (Reuters: uk.reuters.com/article/uk-iran-nuclear-talks/…). Even small banks need SWIFT, don't they? Are they safe in case SWIFT is targeted?
    – Nemo
    May 26, 2018 at 7:28
  • Nobody can afford to have SWIFT shut down. And it isn't a bank, it's a service. Though if your credit union is running some of it's money/data through another bank that might be a vulnerability. But if it is, I'm not sure there's anything constructive you can do about it.
    – keshlam
    Jun 30, 2023 at 12:34

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