FinCEN flags potential Iranian abuse of religious charities

WASHINGTON, Oct. 15, 2026 — The Financial Crimes Enforcement Network (FinCEN) issued an alert urging financial institutions to identify and report suspicious transactions involving religious charities allegedly exploited by Iran's government. The measure forms part of Operation Economic Outcast, a broader Treasury campaign targeting Iranian financial networks and their facilitators, including the Islamic Revolutionary Guard Corps (IRGC).

The alert focuses particularly on the alleged diversion of khums, a religious obligation under which Shiite Muslims contribute one-fifth of their surplus annual income to support religious and social programs. According to Treasury, Iranian authorities have exploited these payments by using organizations associated with prominent clerics and the country's leadership to redirect charitable contributions toward government-linked activities. Funds may be transferred through informal financial networks, including hawala systems and cash couriers, making their ultimate destination difficult to identify.

FinCEN cited previous enforcement actions demonstrating how ostensibly charitable institutions have facilitated Iranian financial operations. These include the Islamic Revolution Mostazafan Foundation, sanctioned by the Office of Foreign Assets Control (OFAC) in 2020, and the Reconstruction Organization of the Holy Shrines in Iraq, which Treasury identified as an institution controlled by the IRGC-Qods Force. The alert also referenced a 2024 criminal case involving Muzzamil Zaidi and Asim Mujtaba Naqvi, who pleaded guilty for their roles in a scheme to transfer religious donations from the United States to Iran in violation of US sanctions.

Financial institutions have been instructed to scrutinize several indicators of potential abuse, including charities collecting substantial donations without providing identifiable charitable services, unexplained transfers between nonprofit organizations, efforts to circumvent financial reporting requirements and transactions involving recipients with no apparent relationship to the originating charity. FinCEN requested that suspicious activity reports connected to the alert include the reference FIN-2026-IRANCHARITYABUSE to assist authorities in identifying related financial activity.

The initiative expands Treasury's scrutiny of Iranian financial networks into religious charitable fundraising, highlighting the potential use of legitimate donation channels to conceal sanctioned financial activity. FinCEN emphasized that the alert does not constitute a blanket restriction on religious charities and that financial institutions should continue applying risk-based due diligence to ensure legitimate humanitarian and charitable transactions remain accessible.