The U.S. Treasury hits Iran's shadow banking, warns about the abuse of religious charities and sanctions a Cuban state-owned bank. Also: a GAFILAT sanctions drill in the Cayman Islands and updates from the Dominican Republic and the region.
From October 15 to 19, Washington focused on Iran's financial networks, with a link to the Caribbean: a Cuban state-owned bank. For banks, remittance companies and fintechs, sanctions risk also comes through correspondents, exchange houses and nonprofits.
1. KYC/AML: Iran's shadow banking and the abuse of religious charities
On October 15, OFAC designated 16 individuals and 10 entities under the "Operation Economic Outcast" campaign. They include a Baghdad-based bank, the International Development Bank for Investment and Finance, which Treasury says provides U.S. dollar access to Iran; two offshore Iranian banks in Kish and Chabahar; four exchange houses; and a Hong Kong company used to move funds through shell companies in Hong Kong and the United Arab Emirates.
On the same day, FinCEN issued an alert on the Iranian regime's abuse of religious charity networks, including the diversion of khums (religious tithes). Its red flags include nonprofits that raise money but provide no visible services, large donations from unknown sources followed by transfers to other nonprofits, behavior aimed at evading reporting, and customers who receive funds from a nonprofit with no clear relationship and withdraw them in cash.
A useful detail for screening: two designees are listed with Dominica nationality or citizenship. Do not confuse Dominica with the Dominican Republic when calibrating country rules. The FATF published no updates during the period.
2. GAFILAT: targeted financial sanctions drill in the Cayman Islands
GAFILAT published the results of its 8th targeted financial sanctions drill on terrorist financing, the first in the Cayman Islands, held without prior notice on September 3 and 4 with the local office OSAIF. The exercise, based on the UN Security Council Resolution 1267 regime, tested FATF Recommendation 6: list dissemination, communication with reporting entities and asset freezing. It identified room for improvement in response times and procedural consistency ahead of the 2027 mutual evaluation.
3. Dominican Republic
On October 16, the Superintendency of Banks issued circular CSB-REG-2026000019, which updates Annex II of its authorization requests manual on the technical study required to issue or contract securities; it is not an AML rule. The Financial Analysis Unit (UAF) published no announcements; its calendar lists the 9th International Anti-Money Laundering Congress (October 23) and a training session on virtual assets (October 29).
4. Latin America: Cuba, Venezuela and Argentina
On October 15, the State Department designated Banco Internacional de Comercio S.A. (BICSA), a Cuban state-owned bank, under Executive Order 14404 for providing services since at least 2022 to Iran's Karafarin Bank, sanctioned in 2020. It warned that foreign banks dealing with BICSA face sanctions risk; the 50% ownership rule also applies.
On October 16, OFAC issued Venezuela-related General License 60A, on transactions related to earthquake relief efforts, and amended its FAQ 1263.
In Argentina, the FIU reported on October 13 on its visit to FinCEN, OFAC and other agencies in Washington, with a commitment to hold a bilateral exchange roundtable in the first quarter of 2027.
Practical takeaways for regulated companies
- Review indirect exposure to Iran: correspondents and counterparties in Iraq, the UAE, Hong Kong and Turkey, and exchange houses.
- Update lists the same day: load BICSA and the 26 new designees and apply the 50% rule.
- Monitor nonprofit customers with FinCEN's red flags, without cutting off legitimate charities.
- Tell Dominica apart from the Dominican Republic in country rules.
- Run your own drill: measure how long it takes you to freeze funds after a UN designation.
At Global KYC & Compliance Solutions, we automate screening and monitoring so your team can react the same day the lists change.
Sources
- OFAC – Iran-related and Cuba designations (Oct 15, 2026)
- U.S. Treasury – Iran's financial networks and shadow banking (Oct 15, 2026)
- U.S. Treasury – Iran's abuse of religious charity networks (Oct 15, 2026)
- FinCEN – Alert on the abuse of religious charity networks (Oct 15, 2026)
- U.S. State Department – Sanctions on BICSA (Oct 15, 2026)
- OFAC – Venezuela-related General License 60A (Oct 16, 2026)
- GAFILAT – 8th TFS drill: Cayman Islands (Oct 2026)
- Dominican Republic Superintendency of Banks – Circular CSB-REG-2026000019 (Oct 16, 2026)
- Dominican Republic UAF – Activities calendar (Oct 2026)
- FIU Argentina – Institutional visit to U.S. agencies (Oct 13, 2026)