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ARTICLE · 26 OCTOBER 2026

OFAC Expands Operation Economic Outcast With Actions Targeting Iranian Procurement, Industry And Sanctions Evasion

Herbert Smith Freehills Kramer LLP
Herbert Smith Freehills Kramer LLP
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The US Treasury Department has launched a sweeping enforcement initiative under Operation Economic Outcast, targeting Iranian military procurement networks, industrial sectors, and shadow banking systems used to evade sanctions. These coordinated actions by OFAC and FinCEN expand sanctions exposure across Iran's automotive and rail industries while designating entities in multiple jurisdictions involved in weapons procurement and illicit financial flows.

GlobalGovernment, Public Sector
Jonathan Cross
Jonathan Cross
Yash Dattani
Yash Dattani
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Overview

The US Department of the Treasury recently announced a series of actions under Operation Economic Outcast targeting Iranian military procurement networks, key sectors of Iran’s industrial base and financial infrastructure that Treasury states has been used to facilitate Iranian sanctions evasion. The measures include sanctions against procurement networks supporting Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), a new sectoral determination and related designations targeting Iran’s automotive and rail sectors, and coordinated actions by the Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN) concerning the A7 Network, a Russia-linked shadow banking network that Treasury states has been used by Iran and other actors to evade sanctions.

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