Operation Economic Outcast Targets Iran’s International Financial Networks and Shadow Banking Architecture
Action Disrupts Iraqi Bank Enabling Iranian Sanctions Evasion and Cuts Off Key Foreign Currency Lifelines
WASHINGTON—Today, as part of Operation Economic Outcast, the U.S. Department of the Treasury disrupted Iran’s efforts to infiltrate the international financial system through an Iraqi bank that also supports Iran’s terrorist proxy militia groups. By dismantling these institutions—including offshore banks and shadow financiers that have moved hundreds of millions of dollars through shell companies and foreign‑exchange specialists across the Middle East and Asia—Treasury is severing critical revenue streams that sustain Iran’s military and proxy forces.
“The noose is tightening around Iran’s economy, and not even Iran’s so-called allies can save it,” said Secretary of the Treasury Scott Bessent. “The Department of the Treasury will not relent until the Iranian regime’s coffers are empty and every remaining financial lifeline sustaining its war machine has been severed.”
In coordination with today’s action, the U.S. Department of State is concurrently designating Cuba-based Banco Internacional de Comercio S.A. (BICSA) pursuant to Section 2(a)(i)(A) of Executive Order (E.O.) 14404 for operating in or having operated in the financial services sector of the Cuban economy. BICSA has provided services to the designated Iran-based Karafarin Bank since at least 2022.
These designations, coupled with additional sanctions on Iran’s shadow banking networks, cut off some of the few remaining financial lifelines the regime can access to prop up its failing economy and fund its military. The designations also expose the regime’s deliberate use of complex offshore structures and front companies to circumvent sanctions and stabilize its economy despite mounting pressure. Taken together, today’s measures target the core financial architecture that enables Iran to evade international scrutiny and fund its destabilizing regional activities. Treasury’s action is being taken pursuant to E.O. 13902, which targets certain sectors of the Iranian economy, including Iran’s financial and petroleum sectors.
OPERATION ECONOMIC OUTCAST IS ISOLATING THE IRANIAN REGIME
Announced by Secretary Bessent on August 24, 2026, dubbed Economic D-Day, Operation Economic Outcast is severing the remaining economic lifelines that sustain the Iranian regime. Treasury has mapped the networks, facilitators, and financial channels that Iran uses to smuggle oil, evade sanctions, and fund terror. Working with partners across the U.S. government, the European Union, the United Kingdom, Gulf partners, and others, Treasury is targeting any source of the regime’s illicit revenue, as well as its sanctions evasion schemes to move funds.
Operation Economic Outcast significantly expanded sanctions risk for those who continue to choose to do business with Iran. Treasury warned that any entity facilitating money laundering or sanctions evasion on behalf of Iran risks being cut off from the U.S. financial system. It also expanded secondary sanctions exposure for those who continue doing business with the Iranian regime and will accelerate the pace of U.S. enforcement. More information on Operation Economic Outcast is available here.
Because Iran is already subject to comprehensive U.S. sanctions, it relies on multi-jurisdictional shadow banking networks to generate revenue and transfer funds abroad. Iran uses these shadow banking networks to launder funds, procure weapons, access U.S. dollar correspondent banking relationships, and bankroll its regional terrorist proxy groups. These networks rely on financial institutions such as the recently designated Golden Global Bank, and Operation Economic Outcast will continue to identify these banks and remove their access to the U.S. dollar.
IRAQI BANK PROVIDING U.S. DOLLAR ACCESS FOR IRAN
Iraq-based International Development Bank for Investment and Finance (IDB) provides financial facilitation services and U.S. dollar access for Iran. IDB has abused its access to the now-dissolved U.S. dollar wire auction and maintains ties to Iranian government entities and Iran-aligned militia groups (IAMGs) in Iraq. IDB was initially established by Iranian companies to support the Iranian economy and supply Iran with U.S. dollars. U.S.-designated Bank Melli, which was located next to IDB in Iraq, closed due to U.S. sanctions and transferred its capital to IDB. IDB uses Iranian capital to conduct business, then collects any profit made and sends it back to Iran in the form of U.S. dollars each month. The bank’s current leadership received ownership of IDB from a dual-Iranian Iraqi financier working for the U.S.-designated Iranian Islamic Revolutionary Guard Corps–Qods Force (IRGC-QF). The financier continues to use his familial relationships to exert influence over the bank.
IDB is being designated pursuant to E.O. 13902 for operating in the financial sector of the Iranian economy.
IRANIAN “OFFSHORE” BANKS
In addition to establishing correspondent banking relationships with financial institutions in allied countries, the Iranian government has authorized certain banks to operate “offshore” in free trade zones. These Iranian banks have been approved by the Central Bank of Iran and the Supreme National Security Council to conduct their operations using foreign currency to aid sanctions evasion schemes. Iran-based Jazireh International Bank Company is an Iranian offshore bank affiliated with Bank Mellat, while Chabahar International Bank Overseas Company is an offshore bank affiliated with Bank Shahr.
Jazireh International Bank Company and Chabahar International Bank Overseas Company are being designated pursuant to E.O. 13902 for operating in the financial sector of the Iranian economy.
IRANIAN OIL “TRUSTEE”
Many of Iran’s key revenue generation streams are corruptly controlled by Iranian regime elites. These revenue streams include the shipping empire of Mohammad Hossein Shamkhani, son of Ali Shamkhani, the late advisor to Iran’s Supreme Leader, and the vast overseas property holdings of Ali Ansari, a key benefactor of Mojtaba Khamenei. One of the elites controlling Iran’s key revenue streams is Iranian national Sayyed Ruhollah Razavi (Razavi), son-in-law of Iran’s hardline Paydari Front leader and one of the top oil trustees on whom the Iranian regime relies to sell oil and repatriate the revenue.
Living in Dubai as one of Iran’s top oil intermediaries, Razavi has worked hand-in-hand with Seyed Naiemaei Badroddin Moosavi, a Hizballah financier and Islamic Revolutionary Guard Corps-Qods Force facilitator designated on April 15, 2026. Prior to the U.S. blockade preventing Iranian oil exports, Razavi was responsible for shipping millions of barrels of oil overseas each month on behalf of the National Iranian Oil Company and its subsidiary, Naftiran Intertrade Company. Razavi has also used his network to move the revenue generated from these oil sales through Iran’s clandestine banking system of shell companies and cash and gold couriers. These networks move funds through Hong Kong to the UAE and Türkiye where they are converted to gold and cash and then smuggled on Mahan Air flights to Iran and its terrorist proxies around the world. Razavi is being designated pursuant to E.O. 13902 for operating in the petroleum sector of the Iranian economy.
In addition to his overseas work on behalf of Iran, Razavi manages Iran-based companies Tejarat Gostar Atlas Parsian Kish Company and Farzanegan Energy Pars Company, the latter of which is currently developing the Farzanegan Gas Condensate Refinery in Iran’s Bushehr Province. Tejarat Gostar Atlas Parsian Kish Company and Farzanegan Energy Pars Company are being designated pursuant to E.O. 13902 for being owned or controlled by, or having acted or purported to act for or on behalf of, directly or indirectly, Razavi.
SHADOW BANKING OPERATIVES
Farab Sorough Qeshm Company (FSAQ), an affiliate of Iran’s Shahr Bank, relies on a cadre of foreign exchange experts to process transactions essential to the operations of Iran’s leading oil sales companies and brokers, including the National Iranian Oil Company, Triliance Petrochemical Company, and the military-controlled Sepehr Energy Jahan Nama Pars Company. FSAQ employees help to coordinate financial transactions through its rahbar network using shell companies established in Hong Kong and the UAE. Today, OFAC is designating seven FSAQ employees who have been involved in foreign exchange operations linked to FSAQ: Zhila Mohammadi, Milad Katebi, Amir Sabeti, Nazanin Borji, Fatemeh Vasighi Meraji, Azadeh Abdolalipur, and Farzad Allahyar. Hong Kong-based Elitesphere Trading Co., Limited, which has been used by FSAQ to move funds through the rahbar network of brokers and front companies in support of Iranian sanctions evasion, is also being designated for operating in the financial sector of the Iranian economy.
Zhila Mohammadi, Milad Katebi, Amir Sabeti, Nazanin Borji, Fatemeh Vasighi Meraji, Azadeh Abdolalipur, and Farzad Allahyar are being designated pursuant to E.O. 13902 for having acted or purported to act for or on behalf of, directly or indirectly, FSAQ.
Iran-based exchange house Seyyed Abbas Hosseini Parsa and Partners Qeshm General Partnership (Hosseini Parsa Exchange), owned and operated by Iranian nationals Seyyed Abbas Hosseini Parsa and Khaled Mohiesnejad, assists the rahbar financial activities of sanctioned Iranian banks alongside Dominican/Iranian national Sadegh Bavi. Sadegh Bavi, an IRGC-Qods Force facilitator and money launderer who also assists in weapons purchases for Iran, is the owner and general manager of the Bavi General Trading Company LLC, which was previously designated by OFAC for helping coordinate tens of millions of dollars’ worth of payments for front companies operated by the Persian Gulf Petrochemical Industry Commercial Co. and Triliance Petrochemical Co. Ltd. Hosseini Parsa Exchange has a close relationship with Bavi General Trading, which has used Hosseini Parsa Exchange’s official documents and letterhead to carry out its own business operations. Sadegh Bavi also owns and operates Bavi and Partners Exchange Company, another Iran-based currency exchange house.
Iran-based exchange house Soheil and Sorush Najafzadeh and Partners Company (Najafzadeh Exchange), owned and operated by Iranian nationals Sorush Najafzadeh, Soheil Najafzadeh, and Mansureh Mirmohammadi, has processed transactions worth hundreds of millions of dollars’ worth of financial transactions for Iranian financial institutions, including entities linked to Bank Mellat and its rahbar, Tejarat Sarir Afrooz Kish. Iran-based exchange house Abolhasan Jalali and Partners Exchange Company (Jalali Exchange), owned and operated by Iranian nationals Abolhassan Jalali and Ensiyeh Mullah Mohammadi, has likewise facilitated tens of millions of dollars’ worth of payments for Iran’s shadow banking networks and sanctioned rahbar entities.
Elitesphere Trading Co., Limited, Hosseini Parsa Exchange, Jalali Exchange, Najafzadeh Exchange, Bavi and Partners Exchange Company, Sorush Najafzadeh, Soheil Najafzadeh, Abolhassan Jalali, Ensiyeh Mullah Mohammadi, and Sadegh Bavi are being designated pursuant to E.O. 13902 for operating in the financial sector of the Iranian economy. Seyyed Abbas Hosseini Parsa and Khaled Mohiesnejad are being designated pursuant to E.O. 13902 for having acted or purported to act for or on behalf of, directly or indirectly, Hosseini Parsa Exchange. Mansureh Mirmohammadi is being designated pursuant to E.O. 13902 for having acted or purported to act for or on behalf of, directly or indirectly, Najafzadeh Exchange.
SANCTIONS IMPLICATIONS
As a result of today’s action, all property and interests in property of the designated or blocked persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons.
Violations of U.S. sanctions may result in the imposition of civil or criminal penalties on U.S. and foreign persons. OFAC may impose civil penalties for sanctions violations on a strict liability basis. OFAC’s Economic Sanctions Enforcement Guidelines provide more information regarding OFAC’s enforcement of U.S. economic sanctions. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated or blocked person, or the receipt of any contribution or provision of funds, goods, or services from any such person. Non-U.S. persons are also prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, and from engaging in conduct that evades U.S. sanctions. Individuals located in the U.S. or abroad who provide information about sanctions violations to FinCEN’s whistleblower incentive program may be eligible for awards if the information they provide leads to a successful enforcement action that results in monetary penalties exceeding $1,000,000. In addition, financial institutions and other persons may risk exposure to sanctions for engaging in certain transactions or activities with designated or otherwise blocked persons.
Furthermore, engaging in certain transactions involving the persons designated today may risk the imposition of secondary sanctions on participating foreign financial institutions. OFAC can prohibit or impose strict conditions on opening or maintaining, in the United States, a correspondent account or a payable-through account of a foreign financial institution that knowingly conducts or facilitates any significant transaction on behalf of a person who is designated pursuant to the relevant authority.
The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the Specially Designated Nationals and Blocked Persons List (SDN List), but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, or to submit a request, please refer to OFAC’s guidance on Filing a Petition for Removal from an OFAC List.
Click here for more information on the persons designated today.
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