US Treasury Warns Foreign Banks Against Dealing with Iran

The US Department of the Treasury warned foreign financial institutions that their continued dealings with sanctioned Iranian financial entities could expose them to sanctions as well, stating that these sanctions can be imposed at any time without prior notice. This came in a memorandum reported by the Italian agency "Dire" on October 6, 2026.

The memo falls under a campaign launched by the Treasury titled "Economic Outcast," announced by Treasury Secretary Scott Bessent. The memo urged financial institutions to immediately cease these types of transactions, warning of potential exposure to civil and criminal liabilities.

The warning is primarily aimed at banks outside the United States that may deal in dollars or transact through American banks, as US regulations give the Treasury the authority to penalize foreign parties when violating sanctions. Observers believe the message raises the risk profile for any institution in the region dealing with restricted Iranian parties.

The memo did not mention specific names of banks or countries. This warning comes at a time when Washington is tightening its grip on financial networks linked to Iran, making sanctions compliance a direct priority for Gulf and Egyptian banks engaged in regional trade and remittances.

What do these terms mean?

Secondary Sanctions: Sanctions by which a country punishes an unaffiliated third party for dealing with a sanctioned entity, such as a foreign bank dealing with Iran.

Compliance: Measures taken by a financial institution to ensure it does not violate laws, sanctions, and regulations.

Civil and Criminal Liability: Legal accountability that may include financial fines on one hand, and prosecution that could lead to criminal penalties on the other.

Department of the Treasury: The US government agency responsible for managing public finances and imposing financial sanctions on countries and individuals.