US targets Iranian financial and charity networks under Operation Economic Outcast

Overview

On October 15, 2026, the U.S. Department of the Treasury (Treasury) announced two actions as part of Operation Economic Outcast, its ongoing campaign targeting Iran and its financial networks. Treasury imposed sanctions on a range of banks, exchange houses, companies, and individuals involved in Iran's financial and petroleum sectors, while the Financial Crimes Enforcement Network (FinCEN) issued an alert concerning potential Iranian abuse of religious charity networks. 

The sanctions action targets financial institutions and other actors that Treasury states provide Iran with access to foreign currency or facilitate sanctions evasion through offshore banks, exchange houses, shell companies, and other financial channels. In a coordinated action, the U.S. Department of State also designated Cuba-based Banco Internacional de Comercio S.A. (BICSA), which the U.S. government states has provided services to sanctioned Iran-based Karafarin Bank since at least 2022.

Separately, FinCEN's alert asks financial institutions to report potential Iranian abuse of religious charity networks, including the diversion of religious tithes known as khums, and provides red flag indicators intended to assist financial institutions in identifying and reporting potentially suspicious activity.

Sanctions targeting Iran's international financial networks

The Office of Foreign Assets Control (OFAC) designated several financial institutions, companies, exchange houses, and individuals pursuant to Executive Order 13902, which provides sanctions authorities relating to certain sectors of the Iranian economy. Among the principal targets is Iraq-based International Development Bank for Investment and Finance (IDB). Treasury states that IDB provides financial facilitation services and U.S. dollar access for Iran and maintains ties to Iranian government entities and Iran-aligned militia groups in Iraq. OFAC designated IDB for operating in the financial sector of the Iranian economy. OFAC simultaneously issued General License FF, which authorizes the wind-down of transactions involving IDB.

OFAC also designated Jazireh International Bank Company and Chabahar International Bank Overseas Company, which Treasury describes as Iranian offshore banks affiliated with Bank Mellat and Bank Shahr, respectively. According to Treasury, the Iranian government has authorized certain banks operating in free trade zones to conduct foreign-currency operations to aid sanctions-evasion schemes. Both banks were designated for operating in Iran's financial sector. 

The action also targets Sayyed Ruhollah Razavi, whom Treasury describes as an oil intermediary involved in selling Iranian oil and repatriating revenue through Iran's shadow banking system. Two Iran-based companies managed by Razavi — Tejarat Gostar Atlas Parsian Kish Company and Farzanegan Energy Pars Company — were also designated. For a full list of entities and individuals targeted in this action, please refer to this link. 

We note that the designations extend to a broader group of exchange houses, companies, and individuals that Treasury states have facilitated financial transactions through networks involving shell companies and other intermediaries. These include seven employees of Farab Sorough Qeshm Company and Hong Kong-based Elitesphere Trading Co., Limited, as well as several Iran-based exchange houses and associated individuals. 

Coordinated designation of Cuban bank BICSA

In coordination with Treasury's action, the U.S. Department of State designated Cuba-based BICSA pursuant to Executive Order 14404 for operating or having operated in the financial services sector of the Cuban economy. The State Department states that BICSA has provided services to Iran-based Karafarin Bank since at least 2022. Treasury designated Karafarin Bank pursuant to Executive Order 13902 in 2020.

FinCEN alert on religious charity networks

Alongside the sanctions action, FinCEN issued an Alert to Counter Iranian Abuse of Religious Charity Networks. The alert is intended to assist financial institutions in identifying and reporting potential Iranian abuse of religious charity networks, including the diversion of khums, a form of religious tithe. FinCEN identifies four red flag indicators:

• A customer that is a charitable organization or nonprofit organization (NPO) solicits donations but does not appear to provide charitable services, or it openly supports the Iranian regime or its terrorist proxies.
• A charitable organization or NPO receives large donations from an unknown source over a short period and then sends significant wire transfers or checks to other charitable organizations or NPOs.
• A charitable organization or NPO, or an employee, officer, or contractor, engages in a pattern of behavior suggesting attempts to evade reporting or recordkeeping requirements.
• A customer receives transfers from a charitable organization or NPO with which it has no clear business relationship and then withdraws the funds in cash or remits them onward.

FinCEN emphasizes that no single red flag is determinative of illicit or suspicious activity and that financial institutions should consider the totality of the relevant facts and circumstances when determining whether activity is suspicious. 

Operation Economic Outcast

Treasury launched Operation Economic Outcast on August 24, 2026, as a campaign targeting Iran and its financial enablers. Last week we posted about action pursuant to Operation Economic Outcast. Treasury stated at launch that the operation would target financial channels used by Iran to evade sanctions and generate revenue and would expand sanctions risk for persons continuing to do business with Iran. The October 15 actions illustrate the breadth of the initiative by combining blocking sanctions against Iran-linked financial actors with a FinCEN alert focused on identifying and reporting potentially suspicious financial activity. For financial institutions in particular, the actions highlight the potential intersection between Iran-related sanctions exposure and anti-money laundering and suspicious activity reporting considerations.

Key takeaways

The October 15 actions further target Iran's access to the international financial system. The sanctions reach banks and other financial intermediaries across several jurisdictions that Treasury states are connected to Iran's financial and sanctions-evasion networks, while the coordinated State Department action targets a Cuban bank that provided services to a designated Iranian financial institution.

For financial institutions, FinCEN's alert provides specific red flag indicators concerning potential abuse of charities and nonprofit organizations. Importantly, FinCEN states that no individual red flag is determinative and emphasizes both a risk-based approach to customer due diligence and the continued access of legitimate charities to financial services.

Companies and financial institutions should consider the October 15 actions when assessing Iran-related sanctions and financial crime risks, including relationships involving financial institutions, exchange houses, charitable organizations, and other intermediaries with potential exposure to Iran.

We are closely monitoring further developments relating to Operation Economic Outcast and U.S. sanctions against Iran. We are also happy to discuss the issues above in further detail.

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