A U-turn transaction, generally speaking, is a banned financial transaction done by a bank in country A (example: USA) for the benefit of a bank in country B (example: Iran) through offshore banks (example: Switzerland). This loophole is used by Iranian banks to avoid U.S. sanctions for their US dollar based transactions. The phrase “U-turn” applies because the funds are transferred to a U.S. bank and instantly turned back as dollars to a European bank.
- ^Weisman, Steven R. (October 16, 2006). “U.S. puts the squeeze on financing in Iran and North Korea – Americas – International Herald Tribune”. The New York Times.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.