OFAC warns foreign banks still doing business with Iran

The US Treasury's Office of Foreign Assets Control (OFAC) published a notice titled "Notice to Foreign Financial Institutions Conducting Business with Iran" on October 5, 2026. The notice is part of Operation Economic Outcast, a Treasury campaign against Iran's finances that Secretary Bessent announced on August 24, 2026.

According to OFAC, foreign banks that support Iran's sanctioned sectors can be designated without advance notice, and can face civil or criminal penalties if their Iran-related payments cause US persons to break sanctions. Separately, OFAC's FAQ 156 says Treasury may impose conditions on, or prohibit, the US correspondent or payable-through accounts of a foreign bank found to have knowingly engaged in such activity. A correspondent account lets a foreign bank move US dollars through a US bank.

The notice points to Iran's use of "shadow banking": networks of trusted parties, front companies and shell companies that move money, mostly from oil and commodity sales, while hiding the link to Iran. It names recent actions as examples. According to OFAC, Banque Misr UAE lost US correspondent access on August 28, 2026; Golden Global Bank in Türkiye and its subsidiaries were designated on September 4, 2026; and VTB Bank Public Joint Stock Company was designated on September 14, 2026.

OFAC says foreign banks should take immediate action to end such activity and relationships. It also asks them to apply, on a risk basis, the measures in three FinCEN publications on Iranian shadow banking, oil smuggling and the use of front companies and digital assets. On the same day, OFAC updated FAQ 156, which explains how Treasury will announce restrictions on a foreign bank's US correspondent or payable-through accounts, including by adding the bank to the CAPTA List.