India, Feb. 28 -- The US is moving to sever a small Swiss bank from access to the US financial system for its alleged support for Iranian and Russian actors, as US and Iranian officials hold indirect talks Thursday in Geneva over Tehran's nuclear negotiations. Treasury's Financial Crimes Enforcement Network proposed a federal regulation Thursday that, if finalized, would prohibit US institutions from doing business with MBaer Merchant Bank AG, which has no relation to the larger Swiss bank Julius Baer.

The bank is accused of funneling over $100 million through the US financial system on behalf of criminals out of Iran and Russia. Founded in 2018, MBaer is both small and new as a bank. A banking profile in 2020 showed MBaer had roughly $2...