US Treasury Warns Foreign Banks They Can Be Sanctioned 'Without Advance Notification' Over Iran Dealings

The US Treasury Department has warned foreign banks that keep doing business with Iran or its financial sector that they could be sanctioned without any warning, in a new alert issued on Monday.

The notice from Treasury's Office of Foreign Assets Control (OFAC), titled "Notice to Foreign Financial Institutions Conducting Business with Iran," is the latest step in Washington's economic campaign against Tehran as talks remain stalled.

What the alert says

"Foreign financial institutions continuing to transact with sanctioned Iranian financial institutions could be targeted at any time without advance notification and should take immediate action to terminate such activity and relationships," the alert said.

According to the notice, banks that help Iran reach the global financial system, including by providing financial services to Iranian banks or their subsidiaries or branches in third countries, risk being sanctioned. They could also face civil and criminal enforcement penalties if Iran-related transactions cause US banks or other US persons to violate sanctions, OFAC said.

In an updated FAQ, Treasury said any strict conditions on a foreign bank's US correspondent or payable-through accounts would be set out in the Federal Register, and barred banks added to its CAPTA List.

Part of 'Operation Economic Outcast'

The warning falls under "Operation Economic Outcast," which Treasury Secretary Scott Bessent announced on August 24. The alert lists earlier actions under the campaign: cutting US correspondent banking access for Banque Misr UAE on August 28, designating Türkiye-based Golden Global Bank and its subsidiaries on September 4, and designating Russia's VTB Bank on September 14.

Treasury said Golden Global Bank had facilitated "tens of millions of dollars' worth of transactions" for the Islamic Revolutionary Guard Corps-Qods Force, and that VTB was designated for its involvement in Iranian sanctions evasion, including correspondent relationships with sanctioned Iranian banks.

Shadow banking in focus

The alert also warns about Iran's "shadow banking" networks. "Iran depends on networks of trusted parties and front and shell companies to circumvent sanctions and maintain access to the international financial system," OFAC said, adding that these networks launder funds mainly from the sale of Iranian oil and other commodities.

On October 1, Treasury designated the Russia-linked A7 Network, which it says Iran used to evade sanctions, as a significant transnational criminal organisation, and targeted Iran's rail and automotive sectors.

Pressure grows as talks stall

Washington has warned other countries in recent weeks to cut business ties with Iran or risk having key companies cut off from the dollar-based financial system, Reuters reported.

The alert came on the same day Iranian President Masoud Pezeshkian called negotiations with the United States "meaningless," Iranian state media reported. Tehran has not publicly responded to the Treasury notice.