On October 1, 2026, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC“) issued a determination under Section 1(a)(i) of Executive Order (“EO“) 13902 that extends sanctions to the automotive and rail sectors of the Iranian economy, designated 28 entities and two individuals under its Iran-related authorities, amended FAQ 831 to broaden its description of the financial sector of the Iranian economy, and designated the Russia-linked A7 Network as a significant transnational criminal organization (“TCO“). On the same day, Treasury’s Financial Crimes Enforcement Network (“FinCEN“) released a proposed rule that would bar covered US financial institutions from processing transmittals of funds involving the A7 Network’s “Sub-Agents,” together with an alert describing how the network operates.
The actions are part of Treasury’s Operation Economic Outcast campaign against Iran, which began on August 24, 2026. (For prior coverage of Operation Economic Outcast, see our previous blog posts available here and here.)
Automotive and Rail Sector Determination and Iran-Related Designations
Under the determination, any person determined to operate in the automotive or rail sectors of the Iranian economy may be sanctioned under EO 13902. The two sectors join the Iranian construction, mining, manufacturing, and textiles sectors named in EO 13902 itself and the financial, petroleum, petrochemical, aviation, digital asset, gold, shipping, and technology sectors identified in subsequent determinations. Pursuant to the new determination, OFAC sanctioned several parties in the Iranian automotive and rail sector, many of which are not based in Iran, as described in this Treasury press release.
Amended FAQ 831 states that persons who knowingly engage in a significant transaction for the sale, supply, or transfer to or from Iran of significant goods or services used in connection with the covered sectors risk exposure to blocking sanctions under EO 13902, and that foreign financial institutions that knowingly conduct or facilitate significant financial transactions for persons designated under EO 13902 risk US correspondent account or payable-through account sanctions. FAQ 831 continues to set out working definitions only for the construction, mining, manufacturing, textiles, and financial sectors and we expect OFAC will publish definitions for the automotive and rail sectors.
Amended FAQ 831 and the Financial Sector of the Iranian Economy
The amended FAQ 831 revises OFAC’s description of the financial sector of the Iranian economy, which the Secretary of the Treasury identified under EO 13902. The prior text in FAQ 831 described the sector by reference to Iranian financial institutions as defined in Section 561.320 of the Iranian Financial Sanctions Regulations, together with their holding companies, affiliates, and subsidiaries. The amended text keeps that category and adds a second: “providers of economic or financial services in or involving Iran.” The examples listed for the second category include types of providers not named in the prior text, such as credit card companies, payday lenders, mortgage companies, and asset managers, and the business activities now listed include transferring funds and facilitating investment. The amended FAQ also reaches “any related activities, including the provision or receipt of goods, services, or technology to or involving the financial sector of the Iranian economy,” and “other persons that, directly or indirectly, own or control providers of such services.”
The new second category may expose non-Iranian banks, payment providers, exchange houses, and other service providers that handle Iran-related business to a higher risk of designation under EO 13902 as it is focused on whether the services are provided in or involving Iran.
A7 Network Designation and FinCen’s Proposed Section 9714 Special Measure
OFAC designated the A7 Network pursuant to under EO 13581, as amended by EO 13863, as a significant TCO. In its press release, Treasury describes the A7 Network as a “shadow banking network with ties to Russia” used by Iran, including the Islamic Revolutionary Guard Corps, to evade sanctions. The designation builds on OFAC’s August 14, 2025 designation of A7 Network entities including A7 LLC and Old Vector LLC. According to Treasury, the blocking of the A7 Network’s property and interests in property extends to “transactions involving Sub-Agents acting for or on behalf of the A7 Network” that are in the United States or in the possession or control of US persons.
In addition to the TCO designation, FinCEN issued a proposed rule under Section 9714(a) of the Combating Russian Money Laundering Act, finding that transactions involving any company operating outside the United States that is controlled by the A7 Network (a “Sub-Agent“) are a class of transactions of primary money laundering concern in connection with Russian illicit finance. The proposed rule would prohibit covered financial institutions from engaging in any transmittal of funds, including convertible virtual currency (“CVC“), involving an A7 Network Sub-Agent, including transmittals from or to any account or CVC address administered by or on behalf of a Sub-Agent.
Under the proposed rule, covered financial institutions would also be required to notify affected persons with which they maintain a direct commercial relationship where a transmittal is prohibited, to document compliance with that notification requirement, and to take a risk-based approach to any additional due diligence. Where the proposed prohibition and an OFAC blocking obligation conflict, FinCEN states that institutions should comply with the obligation to block and would be deemed to comply with the special measure. The proposed rule does not yet impose obligations on covered financial institutions. Comments are due to Treasury by November 4, 2026.
In addition, FinCEN’s alert, FIN-2026-Alert007, urges financial institutions “to be vigilant in detecting, identifying, and reporting suspicious activity, including involving the A7 Network.” The alert describes how the A7 Network operates and provides a list of red flag indicators to help detect, prevent, and report potential suspicious activity related to sanctions evasion and other illicit activities using the A7 Network. The alert notes that, because no single red flag is determinative of illicit or suspicious activity, financial institutions should consider the totality of available facts and circumstances, such as a customer’s historical financial activity, whether the transactions are in line with prevailing business practices, and whether the customer exhibits multiple red flags before determining that a behavior or transaction is suspicious. The alert instructs covered financial institutions reporting suspicious activity related to the A7 Network to use a new key term.
We will continue to monitor and update on any further developments in US sanctions on Iran under Operation Economic Outcast.
