FinCEN Publishes Iran Finance Advisory

U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an Advisory to assist financial institutions in detecting potentially illicit transactions related to Islamic Republic of Iran-backed terrorist organizations.

The Advisory highlights the means by which certain terrorist organizations receive support from Iran and describes several typologies these terrorist organizations use to illicitly access or circumvent the international financial system to raise, move, and spend funds. It also provides red flags that may assist financial institutions in identifying related suspicious activity.

“Iran continues to explore new ways to fund its dangerous and destabilizing activities, including the proliferation of dangerous weapons, malicious cyber activities, and financing of terrorist proxies in the region,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.

Fincen's announcement notes that "recent events have underscored Iran’s involvement in and financing of terrorist activity in the region. "

FinCEN requests that financial institutions reference this  advisory in SAR field 2 (“Filing Institution Note to FinCEN”) and  the narrative by including the
key term “IRANTF-2024-A001”  and select SAR field 33(a)  (Terrorist Financing-Known or  suspected terrorist/terrorist  organization).

Red Flag Indicators

FinCEN has identified the red flags listed below to assist financial institutions in detecting, preventing, and reporting suspicious activity connected to the financing of Iran-backed terrorist organizations.

These red flags are in addition to the red flags identified in FinCEN’s  2018 Iran advisory and 2023 Hamas alert, all of which remain relevant.

• A customer or a customer’s counterparty conducts transactions with Office of Foreign Assets
  Control (OFAC)-designated entities and individuals, or transactions that contain a nexus to
  identifiers listed for OFAC-designated entities and individuals, to include email addresses,
  physical addresses, phone numbers, passport numbers, or CVC addresses.
• Information included in a transaction between customers or in a note accompanying a
  peer-to-peer transfer include key terms known to be associated with terrorism or terrorist
  organizations.
• A customer conducts transactions with a money services business (MSB) or other financial
  institution, including a VASP, that operates in jurisdictions known for, or at high risk for,
  terrorist activity and is reasonably believed to have lax customer identification and verification
  processes, opaque ownership, or otherwise fails to comply with AML/CFT best practices.
• A customer conducts transactions that originate with, are directed to, or otherwise involve entities that are front companies, general “trading companies” with unclear business purposes, or other companies whose beneficial ownership information indicates that they may have a nexus with Iran or other Iran-supported terrorist groups.
• Indicators of possible front companies include opaque ownership structures, individuals and/or entities with obscure names that direct the company, or business addresses that are residential or co-located with
  other companies.

The full advisory is available online at FIN-2024-A001.