US warns foreign banks doing business with Iran they could face sanctions 'without advance notification'

The US Treasury Department said on Monday it was alerting foreign financial institutions that continue to do business with Iran or its financial sector that they may be sanctioned by Washington without advance notice (https://www.reuters.com/world/middle-east/us-says-foreign-financial-institutions-doing-business-with-iran-may-be-2026-10-05/).

“Foreign financial institutions continuing to transact with sanctioned Iranian financial institutions could be targeted at any time without advance notification and should take immediate action to terminate such activity and relationships,” the Treasury said in its alert (https://www.reuters.com/world/middle-east/us-says-foreign-financial-institutions-doing-business-with-iran-may-be-2026-10-05/).

Foreign financial institutions that facilitate Iran’s access to the global financial system, including by providing financial services to Iranian banks or their subsidiaries or branches in third countries, risk being sanctioned for operating in or supporting sanctioned sectors of Iran’s economy, the Treasury said. They could also face civil and criminal enforcement penalties should Iran-related transactions cause US financial institutions or other US persons to violate sanctions (https://www.reuters.com/world/middle-east/us-says-foreign-financial-institutions-doing-business-with-iran-may-be-2026-10-05/).

Among the “strict conditions” Treasury warned could be imposed: prohibiting the opening or maintaining of US correspondent or payable-through accounts for a foreign financial institution engaging in sanctioned activities (https://www.reuters.com/world/middle-east/us-says-foreign-financial-institutions-doing-business-with-iran-may-be-2026-10-05/).

The alert is part of Washington’s effort to cut Iran’s financial lifelines during the war that began on February 28, when the US and Israel attacked Iran and Tehran responded with strikes on Israel and Gulf states hosting US bases. Iran was already heavily sanctioned before the war, but in recent weeks Washington has warned other countries to cut business ties with Iran or risk having key companies and entities cut off from the dollar-based financial system (https://www.reuters.com/world/middle-east/us-says-foreign-financial-institutions-doing-business-with-iran-may-be-2026-10-05/).

The Treasury said Iran’s government operated so-called “shadow banking” channels to circumvent US sanctions, and urged foreign institutions to identify and avoid such activity (https://english.alarabiya.net/News/middle-east/2026/10/06/us-warns-foreign-financial-institutions-not-to-do-business-with-iran). Since late August, Washington has stepped up its economic-isolation campaign, announcing new restrictions on Iran’s financial, cryptocurrency, rail, automotive and manufacturing sectors, and taking action against two banks — one in the United Arab Emirates and another in Turkiye — over alleged aid to Tehran (https://ua.news/en/world/minfin-ssha-poperediv-inozemni-finustanovi-pro-sanktsiyi-za-operatsiyi-z-iranom-asharq-al-awsat).