Loading…
Loading…
E.O. 13902 (signed 10 January 2020) authorises secondary sanctions against foreign persons operating in any sector of Iran's economy that the Secretary of the Treasury (in consultation with the Secretary of State) designates as of strategic concern. The 8 October 2020 determination invokes that authority for the financial sector, defined under FAQ 831 to include any person engaged in the business of accepting deposits, making, granting, transferring, holding, or brokering loans or credits, or purchasing or selling foreign exchange, securities, or commodity futures or options. By adding finance to the list of sectoral targets (alongside the construction, mining, manufacturing, and textiles sectors previously identified under E.O. 13902), OFAC closed the last major non-energy non-petrochemical channel that Iran's economy retained for international transactions.
The simultaneous designation of eighteen banks blocks all property and interests in property of those institutions in US jurisdiction and prohibits US persons from dealing with them. The downstream effect runs through the foreign-financial-institution (FFI) provisions of E.O. 13902: any non-US bank that knowingly conducts or facilitates a "significant" financial transaction with a designated Iranian bank can have its US correspondent or payable-through accounts closed or restricted. Because the 18 designated banks span essentially the entire Iranian commercial banking system (including the formerly-non-designated Pasargad, Saman, Karafarin, etc.), the practical effect is an extraterritorial freeze of dollar and correspondent-banking access for almost all Iranian-resident entities.
The 45-day wind-down (Treasury General License 8L, expiring 22 November 2020) gave non-US counterparties time to terminate pre-existing transactions without secondary-sanctions exposure.
The substantive economic measure is from 2020, but the Trump 2.0 republication in the Federal Register on 1 October 2025 is part of the maximum-pressure restoration architecture announced under NSPM-2 (4 February 2025). The republication formalises a determination that had been live on the OFAC website but never printed in the FR — which matters legally because some litigation challenges have argued that publication-in-FR is a procedural requirement for full enforceability of secondary-sanctions authority. By republishing now, OFAC removes one residual procedural-defence avenue and locks in the full enforcement perimeter ahead of the post-NSPM-2 designation wave (Hengli shadow-fleet 2026-04-24, May-1 designations 2026-05-01, EO 14382 secondary-tariff authority 2026-02-06, etc.).
channel by which Iran can pay for imports or repatriate oil-export proceeds (now reinforced by the 2025-26 OFAC shadow-fleet enforcement).
document avoidance of "significant" transactions with the 18 designated banks; due-diligence costs persist as a structural drag on Iran-adjacent trade flows.
any future enforcement action against an FFI that processed Iranian-bank transactions cites both the 2020 determination and its 2025 FR publication.
rial's structural depreciation channel by removing all formal correspondent-banking pathways, forcing reliance on hawala and cryptocurrency intermediation that carries 5-15% friction premia.
to OFAC's secondary-sanctions authority that hinged on publication?
(e.g., explicit inclusion of Iranian crypto exchanges or fintech intermediaries) or rely on supplementary EO 14382 secondary-tariff authority for new perimeters?
remains determined case-by-case under E.O. 13902 §1(a)(ii); SDN expansion in 2025-26 has been incremental rather than wholesale.