Who was sanctioned
The U.S. Treasury Department announced sanctions on October 15 against an Iraq-based bank, two Iran-based offshore banks affiliated with larger Iranian banks, four Iranian currency exchange houses and their owners, a Hong Kong trading company, seven employees of an Iranian foreign-exchange firm, and a Dubai-based oil intermediary and two companies he controls. Treasury said the networks moved hundreds of millions of dollars through shell companies and foreign-exchange specialists across the Middle East and Asia. [1]
Treasury said the Iraqi bank gave Iran access to U.S. dollars, sends profits to Iran in dollars each month and has ties to Iran-aligned militia groups in Iraq. It also said the bank had abused access to Iraq's now-dissolved U.S. dollar wire auction. Those descriptions are Treasury's stated basis for the designations. [1]
The designations were made under Executive Order 13902 as part of Operation Economic Outcast, the pressure campaign Treasury Secretary Scott Bessent announced in August. "The noose is tightening around Iran's economy, and not even Iran's so-called allies can save it," Bessent said. The State Department separately designated a Cuba-based bank that it said has provided services to an Iranian bank since at least 2022. [1]
What the sanctions mean for banks
Property of the designated people and companies that is in the United States or controlled by U.S. persons is blocked, and U.S. persons generally may not deal with them without a license. Treasury also warned that foreign banks that knowingly handle significant transactions for the targets could lose access to U.S. correspondent accounts, the accounts foreign banks use to move dollars through the American banking system. [1]
A separate warning about charities
On the same day, Treasury's Financial Crimes Enforcement Network, known as FinCEN, issued an alert asking financial institutions to report possible Iranian abuse of religious charity networks, including the diversion of religious tithes known as khums. It listed red flags such as charities that solicit donations but provide no charitable services, and large donations from unknown sources that are quickly wired on to other nonprofits. [2]
FinCEN said legitimate charities should keep access to financial services, and it reminded banks to judge nonprofit customers case by case rather than cutting them off wholesale. [2]
What remains uncertain
The descriptions of the targets' conduct come from Treasury and have not been tested in court. Designated parties can petition OFAC to be removed from the sanctions list.