On August 24, 2026, as part of the Trump administration’s “Operation Economic Outcast,” the U.S. Department of the Treasury and the Office of Foreign Assets Control (OFAC) launched a wave of economic initiatives aimed at further curtailing the ability of Iran to engage in international commerce with both U.S. and non-U.S. persons.¹  Among other initiatives, Operation Economic Outcast included new determinations by the Treasury Department relating to the following five sectors of the Iranian economy, which will allow for further secondary sectoral sanctions on a targeted basis against individuals/entities in these sectors: (i) digital assets, (ii) technology, (iii) gold, (iv) aviation, and (v) shipping. OFAC’s determination did not provide specific definitions for these sectors, which means at this time they should be interpreted broadly. Additionally, OFAC suspended five General Licenses that allowed limited transactions between Iran and the United States in limited sectors, and issued General License BB that authorizes all transactions that are “ordinarily incident and necessary to the wind down” of transactions under the suspended licenses through September 8, 2026.²  

As a result of these actions, both U.S. and non-U.S. persons face an increased risk of penalties if providing services to any foreign person, regardless of where they are located, in these sectors when an Iranian nexus exists. The scope of those potential penalties will depend on a particular transaction’s facts, but could potentially include civil and criminal penalties for U.S. persons, or for non-U.S. persons, the seizure of U.S. assets, denial of import/export licenses, restrictions on the use of certain financial institutions, or even transacting parties themselves becoming sanctioned via the Specially Designated Nationals (SDN) List. Ultimately, these administrative actions will require increased diligence and monitoring of transactions to ensure compliance with U.S. law, even for international companies. 

The Treasury Department also took several actions designed to curtail the ability for Iranian goods or technology to be transported, including by sanctioning approximately 60 entities, individuals, and “shadow fleet” vessels, which Treasury states have enabled Iranian activities in missile technology, cyber operations, and oil revenue generation. Those sanctions targeted businesses in China, the United Arab Emirates, Singapore, and several other countries. Specifically:

• Azure Shipping PTE. LTD. was sanctioned for operating in the petroleum sector of the Iranian economy. 
• Bunkering service providers Shipoil Limited, Shipoil FZCO, Ship Fuels and Trade DMCC, along with Unique Oasis Shipping Services LLC, Target Horizon Shipping LLC, and Good Luck Shipping LLC, were sanctioned for providing bunkering services to Iran-linked tankers. 

On the same day, the U.S. State Department sanctioned numerous entities, individuals, and vessels “to further expose individuals and entities that enabled strikes against U.S. forces and allies and to restrict the revenue that the Iranian regime uses to attack its neighbors, support terrorism abroad, brutally oppress its own people, and hold the global economy hostage.”³ The State Department’s targets were designated pursuant to Executive Order (E.O.) 13846, which authorizes and reimposes certain sanctions with respect to Iran, and E.O. 13949, which targets certain persons with respect to the conventional arms activities of Iran.

As relates to shipping in particular and the Strait of Hormuz, OFAC issued specific guidance addressing sanctions risk, for both U.S. and non-U.S. persons, in connection with any toll payments, fees, and other requirements imposed by the Iranian regime, or its proxies, in exchange for passage through the strait.⁴ This guidance highlights both primary and secondary sanctions risks for U.S. and non-U.S. persons, including that such exposure may arise not only from making payments to specified Iranian entities, but also by soliciting guarantees for safe passage from them. OFAC’s guidance notes that accepting insurance or other services or responding to information demands may be sanctionable even if no payment or other exchange of value occurs.⁵

As the Iranian conflict continues to evolve, commercial parties should conduct regular reviews of updates to sanctions policies and enforcement by the Treasury Department and OFAC as well as conduct necessary due diligence for transactions that may relate to entities or individuals located in Iran, even if indirectly. Cozen O’Connor’s Trade Regulation, Export Controls & Sanctions Team continues to monitor this space closely. Please contact the authors of this alert with any questions.