OFAC Expanded Iran Sanctions for Global Banks

Foreign institutions that facilitate Iranian financial access now face stricter US correspondent account restrictions.

Updated on Oct. 6, 2026 in Financial Services

Isometric editorial illustration of a heavy bank vault door with protruding locking bolts, representing strict institutional financial regulation. — The US Treasury’s Office of Foreign Assets Control expanded sanctions guidance, threatening foreign banks with the loss of US correspondent accounts if they facilitate Iranian transactions. AI Illustration. Upload story photo >

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The US Office of Foreign Assets Control issued a new sanctions alert warning foreign financial institutions against facilitating Iran's access to the global financial system. Institutions that knowingly engage in these activities risk losing access to their US correspondent or payable-through accounts.

Why it matters

The updated guidance under Executive Order 13902 underscores the heightened risk for international banks, as compliance failures now carry the potential for both civil and criminal enforcement. Operating with sanctioned entities threatens a bank's ability to clear US dollar transactions.

The agency released FAQ 156 detailing new risks for institutions under Executive Order 13902, which governs secondary sanctions. This enforcement action highlights a shift in regulatory scrutiny for any bank maintaining cross-border payment flows linked to Iranian sectors.

The players

US Office of Foreign Assets Control

A financial intelligence and enforcement agency of the US Treasury that administers and enforces economic and trade sanctions.

Banque Misr UAE

An international financial institution that has been severed from US correspondent banking access due to sanctions violations.

Golden Global Bank

A Turkish financial institution that was recently added to the Iran sanctions list.

VTB Bank PJSC

A Russian-controlled financial institution added to the Iran sanctions list.

The details

Under the updated guidance, banks that knowingly support Iranian financial sectors face the severance of their US correspondent or payable-through accounts. This mechanism effectively isolates a target institution from the US financial system, preventing them from processing dollar-denominated trades. Foreign banks must now perform enhanced due diligence on all transactions to avoid potential civil and criminal penalties.

October 6, 2026: OFAC published the sanctions alert and FAQ 156.

Market Landscape

This notice extends the reach of secondary sanctions established under Executive Order 13902. It signals a move toward stricter oversight of international correspondent banking relationships to curb Iranian financial activity.

Operators conducting international trade should verify that their banking partners have robust compliance programs to avoid sudden loss of payment access. Financial institutions must re-evaluate counterparty risk to ensure their correspondent banking channels remain insulated from these sanctions.

The takeaway

The primary risk for businesses is the sudden disruption of international payment flows if their banks are caught in these secondary sanctions. Compliance officers should monitor FAQ 156 and confirm that bank partners are not involved with entities explicitly named in the new OFAC alert.