From the Counterterrorism Blog (HT: Rocket’s Brain Trust):

By Michael Jacobson
Jerusalem Post, July 30, 2007

As the US presses for a stronger UN Security Council resolution on Iran, the Treasury Department continues its international outreach to highlight Iran’s illicit financial activity. While the Treasury-led campaign has achieved considerable success, this initiative would be far more effective if the US was not the only voice decrying the risk that Iran’s deceptive practices pose to the global financial system.
Over the past year and a half, senior Treasury officials have traveled the world, briefing their finance ministry counterparts and the private sector on the range of Iran’s deceptive financial activity. This includes: Iran’s use of front companies; frequent requests by Iranian state-owned banks to remove their names from financial transactions; and the involvement of these same banks in Iran’s nuclear and missile programs and terrorist financing.

In light of this, the Treasury Department has argued that doing business with Iran is a risky endeavor, and could ultimately cause great reputational harm to those associated with the regime.

Major international financial institutions have been responsive to the Treasury pitch. According to Treasury, global institutions—including Switzerland’s UBS and Credit Suisse and the UK’s HSBC —have either terminated or dramatically reduced business with Iran. Both the potential reputational risk and the prospect of being shut out of the US market were likely factors in their decisions.