OFAC warns banks to cut Iran ties or face sanctions under ‘Operation Economic Outcast’

WASHINGTON, October 5, 2026 — The U.S. Treasury Department’s Office of Foreign Assets Control issued a new alert warning foreign financial institutions that continue doing business with Iran or its financial sector that they could be sanctioned under the Trump administration’s “Operation Economic Outcast.” OFAC OFAC said foreign banks continuing to transact with sanctioned Iranian financial institutions could be targeted “at any time without advance notification” and urged institutions to immediately terminate such activities and relationships. The warning extends to financial services involving Iranian banks, their subsidiaries and branches in third countries.

The alert highlights the risk posed by Iran’s “shadow banking” networks, which Treasury says use trusted intermediaries, front companies and shell companies to disguise funds largely generated through Iranian oil and commodity sales. Financial institutions potentially exposed to such networks were advised to strengthen measures to detect and disrupt sanctions-evasion activity. OFAC The notice forms part of Operation Economic Outcast, launched in August to increase pressure on Iran’s access to international finance. Treasury has since expanded secondary sanctions exposure and targeted banks and financial networks accused of enabling Iran to move funds internationally. Recent actions have also focused on Iran-linked weapons procurement, industrial sectors and the Russia-connected A7 shadow banking network. U.S. Department of the Treasury

OFAC also amended Iran-related FAQ 156. The guidance says that when Treasury determines a foreign financial institution has knowingly engaged in sanctionable activity, it may impose restrictions on the institution’s U.S. correspondent or payable-through accounts. Institutions barred from such access will be identified on OFAC’s CAPTA List.

Separately, Monday’s OFAC update included numerous removals from the Specially Designated Nationals List and amendments to existing records spanning several sanctions programs, including Iran, narcotics-related and other legacy designations.