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Secondary sanctions

US pressure on a foreign person

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US regulation & institutions

Short definition

Measures that force a non-US person or bank to choose between specified dealings with a sanctioned target and important access to the United States, including dollar correspondent accounts. They use access to the US market and financial system as leverage.

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Intuition

The foreign person is not simply told that its local transaction is illegal. It is told that continuing it can cost access to the United States.

Why it matters now

The decisive Iran question is whether Washington will apply this leverage to a major foreign bank rather than another replaceable intermediary.

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