WASHINGTON: The US Treasury Department warned foreign financial institutions on Monday that transactions with sanctioned Iranian banks could trigger Iran sanctions without advance notice.
Its Office of Foreign Assets Control (OFAC) urged institutions to end those transactions and relationships immediately.
OFAC issued the alert under “Operation Economic Outcast”.Institutions “could be targeted at any time without advance notification”, the agency warned.
The warning covers financial services that help Iran access the global financial system. These include services for Iranian banks’ branches and subsidiaries in third countries.
Meanwhile, institutions could face civil or criminal penalties if their Iran-related transactions cause US financial institutions or other US persons to violate sanctions.
Potential restrictions include prohibiting institutions from opening or maintaining US correspondent or payable-through accounts.
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Treasury could instead impose strict conditions on those accounts. OFAC also accused Iran of using intermediaries, front companies and shell companies to circumvent restrictions.
It described these arrangements as “shadow banking” networks that conceal Iranian connections to proceeds from oil and commodity sales.
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Earlier enforcement actions targeted banking access for institutions in the United Arab Emirates and Turkey over alleged assistance to Iran.
To reduce exposure, OFAC urged institutions to detect and disrupt such activity. It recommended mitigation measures from the Financial Crimes Enforcement Network (FinCEN).
