The U.S. Treasury Department’s Office of Foreign Assets Control recently issued an alert warning foreign financial institutions that they could face sanctions under “Operation Economic Outcast” if they keep doing business with Iran or its financial sector. The alert, issued on October 5, 2026, warned that banks that continue to transact with sanctioned Iranian institutions could be targeted without warning, and it urged them to wind down those relationships immediately. The alert follows Treasury Secretary Scott Bessent’s announcement of the campaign on August 24, 2026. As part of the campaign, Treasury widened secondary sanctions exposure under Executive Order 13902 for anyone supporting Iran’s digital asset, technology, gold, aviation, and shipping sectors. Several enforcement steps came soon after, including the designation of Banque Misr UAE in August 2026, which OFAC described as a key channel for Iran’s access to U.S. dollars.
The alert stresses that foreign institutions that support Iran’s efforts to access the global financial system can be sanctioned for operating in or supporting sanctioned sectors of Iran’s economy. This includes serving Iranian banks or their branches and subsidiaries in other countries. These institutions could also face civil and criminal penalties if their Iran-related transactions cause U.S. banks or other U.S. persons to violate sanctions. OFAC also pointed to Iran’s use of “shadow banking” networks that launder proceeds, mostly from oil and other commodity sales, to make the money harder to trace back to Iran. OFAC ultimately urged exposed institutions to identify and disrupt this activity if they have not already done so.