Policymakers on both sides of the Atlantic view tough economic sanctions against Iran as perhaps the last peaceful means of curbing the Islamic Republic's appetite for nuclearization.

While sanctions aren't a silver bullet, properly targeted, they might yet succeed in pressuring the regime to change course.

Most banks worldwide have stopped providing Iran financial services, yet it has recently come to light that London's HSBC and Standard Chartered have served Iran as a gateway to the international financial market. Both are under heavy fire from U.S. regulators, who have made it clear that banks doing business in the United States must cut their ties with illicit Iranian entities or risk losing access to the U.S. market.

The U.S. government has accused HSBC of facilitating illicit transactions worldwide for much of the last decade, becoming a "sinkhole of risk" that acted counter to the public interest, pursuing financial gain above all.

U.S. lawmakers recently issued a 335-page report (and 530-page addendum of evidence) providing a vivid picture of the bank's shortcomings. HSBC reportedly laundered money on behalf of Mexican drug cartels; acted as a major conduit to rogue regimes, initiating more than 25,000 transactions on behalf of Iran in amounts totaling $19.4 billion through its American affiliate alone; provided correspondent banking services to suspect banks, including Saudi Arabia's Rajhi Bank (whose key founder was a generous al-Qaida donor) and other suspect clients; and offered services to bearer share corporations, used by money launderers to move funds, despite repeated warnings from regulators.

This type of behavior shouldn't be tolerated under any circumstances. HSBC issued an apology and its head of compliance, David Bagley, resigned following a 20-year career at the bank.

"HSBC has fallen short of our own expectations and the expectations of our regulators," Bagley noted with dry understatement.

Standard Chartered is accused of laundering more than $250 billion on Iran's behalf and facilitating more than 60,000 transactions. The New York State Department of Financial Services has labeled the bank a "rogue institution" that served as a "front for prohibited dealings" with Iran. The FBI launched an investigation that reportedly uncovered money flowing to Iran, Libya, Myanmar and Sudan, in addition to a manual teaching employees how to mask illegal transactions.

NYSDFS has reportedly reviewed more than 30,000 Standard Chartered documents, one of which allegedly stated, "You [expletive] Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians?"

Yet the view that the United States is acting alone on this issue is mistaken. The United Nations, the European Union, Australia, Canada and other Western countries have taken steps to isolate Iranian banks suspected of facilitating terrorism and the pursuit of nuclear weapons. European lawmakers and regulators have blacklisted many of the same entities and financial institutions as the United States and this type of language should be a source of concern to them as well.

Standard Chartered "strongly rejects the position and portrayal of facts" by NYDFS, insisting that 99.9 percent of its transactions with Iran complied with U.S. regulations and that those that didn't totaled less than $14 million.

Even if these figures are true, this hardly absolves Standard Chartered of responsibility for gross violation of U.S. regulations.

In the United States, the powers needed to take specific action against designated banks, their affiliates and their assets are largely enshrined in the 2001 Patriot Act and the Comprehensive Iran Sanctions, Accountability and Divestment Act. Those that continue doing business with sanctioned Iranian entities face serious punishment; the U.S. Justice Department has the power to close any branches they maintain on U.S. soil, cut off their correspondent account to any U.S. bank and force a sale of their U.S. assets.

In Europe, particularly the United Kingdom, some are claiming that this is a protectionist measure meant to promote U.S. business interests. Nothing could be further from the truth.

The sanctions regime targeting Iran is international and for years the U.S. Treasury has quietly warned financial institutions to stop doing business with rogue regimes or face the consequences.

More than 80 financial institutions worldwide have completely cut off or significantly reduced their relationship with Iran.

Banks that continue doing business with those who facilitate terrorism should be given a stark choice: give up those business ties, or give up the U.S. market.

Since 2008, the U.S. government has levied fines totaling close to $2 billion against banks including JP Morgan, Barclays, Credit Suisse, ING, Lloyds of London and HSBC.

But the tide has begun to turn. U.S. officials, including members of Congress (specifically, those on the House Homeland Security and Government Affairs Committee), the Manhattan District Attorney's Office, U.S. Treasury and the NYSDFS are considering more punishing measures against those who continue to flout existing legislation and do business with rogue regimes.

In October 2011, the NYDFS became the newest financial regulator's office to assume oversight of the New York banking and insurance sectors.

Ultimately, European and other international banks wishing to do business in America or transact in dollars will have to choose whether to pay or play, to comply with U.S. laws or close any business that crosses American interests. Otherwise, U.S. lawmakers might make the decision for them.

(Avi Jorisch, a former U.S. Treasury Department official, is a senior fellow for counter-terrorism at the American Foreign Policy Council in Washington.)

(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)