On September 8, 2026, as part of Operation Economic Outcast, the U.S. Department of the Treasury implemented further sanctions actions on a number of entities supporting Iran’s aviation sector. In its press release, Treasury states that the 36 sanctions targets are used “to move weapons, personnel, and illicit cargo” on behalf of Iran. Treasury’s designations are made pursuant to its determination to include Iran’s aviation sector within the scope of Executive Order 13902 (implemented by President Trump in January 2020). These actions follow Treasury’s announcements on August 24, 2026. Please see our prior alert for further discussions of those activities and their potential significance.

The sanctions targets include 27 Iranian airlines as well as various entities located in Kazakhstan, Malaysia, Türkiye, and the United Arab Emirates, which Treasury states have acted as intermediaries to allow for the unlawful shipment of U.S.-origin aircraft to now-sanctioned entities such as Mahan Air.

In addition to actions on these specific entities, Treasury also indefinitely suspended the following four policies and authorizations:

• Allowing for payments relating to overflights in Iranian airspace or emergency landing in Iran of aircraft owned by a U.S. person or registered in the U.S.

• Potentially granting specific licenses for transactions with Iranian entities for the exportation or reexportation of goods, services, and technology to ensure the safety of civil aviation and safe operation of U.S.-origin commercial passenger aircraft.

• Authorizing goods or services from U.S. persons to non-Iranian air carriers transporting passengers or goods to/from Iran if they related to (i) bunkering, (ii) emergency repairs, or (iii) other circumstances that could not be anticipated prior to the air carrier’s departure for the United States.

• General License J-1, which authorized the reexportation of non-U.S. person aircraft to Iran on temporary sojourn, subject to various conditions.

Treasury’s Financial Crimes Enforcement Network (FinCEN) also issued a new alert specific to the commercial aviation industry that contained red flags and typologies for financial institutions to detect and report activity relating to Iran’s procurement of aircraft and aircraft parts. FinCEN’s guidance identifies potential methodologies by which Iranian actors, including through third-party intermediaries, may seek to evade sanctions prohibitions and puts financial institutions on heightened alert to monitor for these activities.

In conjunction with these updates, OFAC also reiterated that violations of sanctions regulations may result in civil or criminal penalties and may assess such penalties on a strict liability basis. For non-U.S. persons, OFAC also emphasized the potential imposition of secondary sanctions, which could be administered through restrictions on U.S. or foreign financial institutions or even the violating party being designated by Treasury itself.

These actions further demonstrate the increased emphasis Treasury and the Administration are placing on any transactions with an Iranian nexus for both U.S. and non-U.S. persons. Transacting parties, therefore, need to maintain an equally stringent compliance posture with routine and robust monitoring to remain updated on the dynamic nature of the U.S. actions against Iran and Iranian economic actors.

Please contact the authors of this alert with any questions.