Iran is secretly trying to set up banks in Muslim countries around the world, including Iraq and Malaysia, using dummy names and opaque ownership structures to skirt sanctions that have increasingly curtailed the Islamic republic's global banking activities, U.S. officials say.

The Treasury Department has blacklisted 16 Iranian banks for allegedly supporting Iran's nuclear program and terrorist activities; other countries have followed suit with their own measures. Tehran's search for new banking avenues is a sign of the growing effectiveness of the sanctions, U.S. officials said.

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