Earlier this month, as part of Operation Economic Outcast targeting Iran, the US Department of the Treasury ushered in a flurry of administrative and regulatory changes. On September 10, 2026, the Office of Foreign Assets Control (“OFAC“) modified its Iran-related specific licensing policy, announced a settlement agreement, and updated the Specially Designated Nationals and Blocked Persons List (“SDN List“). These changes landed two days after OFAC’s September 8, 2026 action against Iran’s aviation sector, which suspended three civil aviation-related authorizations under the Iranian Transactions and Sanctions Regulations (“ITSR“), together with an additional, agency-issued general license. Both actions follow the August 24, 2026 sectoral determinations under Executive Order 13902 (see our previous blog post here) and accompany developments by another Treasury agency, the Financial Crimes Enforcement Network (“FinCEN“).
I. Aviation-Related Actions: Designations, Suspended Authorizations, and Wind-Down Licenses
OFAC’s September 8, 2026 action against Iran’s aviation sector had three components.
- New SDN List entries. The September 8 action added 27 Iranian airlines to the SDN List under Executive Order 13902, covering what Treasury describes as all remaining Iranian airlines, together with parties in the United Arab Emirates, the United Kingdom, Türkiye, Malaysia, and Kazakhstan connected to Mahan Air’s aircraft procurement and cargo networks.
- Suspension of civil aviation authorizations. Effective September 8, 2026, OFAC suspended indefinitely a general license which authorized payments to Iran for overflight of Iran and emergency landings in Iran by US-owned or US-registered aircraft (31 CFR 560.522); the statement of a case-by-case licensing policy on certain aircraft safety-related transactions (31 CFR 560.528); and a general license which authorized bunkering and emergency repairs (31 CFR 560.529). OFAC also suspended the General License “Authorizing the Reexportation of Certain Civil Aircraft to Iran on Temporary Sojourn and Related Transactions,” (“GL J-1“) as of the same date.
- Issuance of General License DD to wind down previously authorized transactions. OFAC issued General License DD authorizing transactions ordinarily incident and necessary to winding down transactions previously authorized under the suspended provisions. This general license expired on September 23, 2026.
- Issuance of General License 37 to wind down transactions with certain SDNs. OFAC also issued General License 37 under the Global Terrorism Sanctions Regulations, authorizing the wind-down of transactions involving ECT Aviation Support LLC, S Sistem Lojistik Hizmetler Anonim Sirketi, Mes Cargo Transportation Tourism and Foreign Trade Limited Company, and entities owned 50 percent or greater by one or more of them, provided any payment to a blocked person was made into a blocked, interest-bearing account located in the United States. This general license expired on September 23, 2026.
II. New Specific Licensing Policy for Iran-Related License Applications
On September 10, 2026, OFAC modified its Iran-related specific licensing policy. The key take-aways include the following:
- Presumption of denial. Any pending or new applications for specific licenses as of September 10, 2026 are reviewed with a presumption of denial, except in certain circumstances, such as risk to life, limb, as required by law, or for environmental safety.
- Case-by-case review of the exceptions. Even applications that fall into the newly stated exceptions will only be reviewed on a case-by-case basis.
- No change to the prohibitions themselves. This change is a statement of administrative posture rather than a new prohibition, so the scope of the ITSR prohibitions is unchanged. Its practical effect is to remove the licensing route that companies have used to preserve narrow Iran-related activity.
III. Other Iran-Related Designations, OFAC Settlement Agreement, and FinCEN Whistleblower Bulletin
- Additional designations. On September 10, OFAC designated additional individuals and entities in Iraq, Lebanon, the UAE, and Türkiye tied to Kata’ib Hizballah and Hizballah. According to OFAC, these entities fuel Iran’s destabilizing influence in the Middle East.
- September 10 settlement. OFAC also announced on September 10 that an individual, a US lawful permanent resident, agreed to pay $1,427,230 to settle 39 apparent violations of the ITSR arising from management consulting services provided to an Iranian software company, receipt of Iranian-origin dividends in US bank accounts, and the purchase of real property in Iran. OFAC found the conduct egregious and not voluntarily self-disclosed. This OFAC enforcement case demonstrates that Iran is a top priority in enforcement and highlights that the provision of consulting services to Iran by a US person or while living in the United States is contrary to the ITSR.
- FinCEN Whistleblower Bulletin and Proposed Rule. Concurrently, FinCEN issued a Whistleblower Bulletin that encourages the public to submit information about Iran-related illicit finance and violations of OFAC’s sanctions programs, the Bank Secrecy Act, and other national security laws. Tips that lead to the collection of monetary penalties can be awarded 10 to 30 percent of the penalties, and the bulletin includes a number of typologies or red flags to look out for. On August 28, FinCEN also published a proposed rule that would restrict the five branches in the UAE (but not elsewhere) of Egyptian state-owned Banque Misr from US correspondent banking access, due to their alleged processing of payments for companies potentially associated with Iranian shadow-banking networks.
We will continue to monitor and update on any further developments in US policy on sanctions and export controls applicable to Iran.
