Under “Operation Economic Outcast,” the Financial Crimes Enforcement Network (FinCEN) issued an alert directing financial institutions to identify and report the Iranian regime’s alleged abuse of religious charity networks, particularly the diversion of Shi’a religious tithes known as khums.

FinCEN said the activity allegedly enriches regime elites, finances domestic repression, and supports Iranian terrorist proxies and destabilizing operations abroad.

Primary financial threat

  • Ostensibly religious organizations collect donations or khums on behalf of Iranian ayatollahs with regime ties.
  • Funds may be transferred to Iran or Iran-linked actors through hawalas, cash couriers, wire transfers, checks, and intermediary nonprofit organizations.
  • The networks can obscure beneficiaries and disguise regime or terrorist financing as legitimate charitable activity.

FinCEN red flags

  • A charity or nonprofit solicits donations but provides no apparent charitable services, or publicly supports the Iranian regime or its terrorist proxies.
  • A charity or nonprofit receives large donations from unknown sources over a short period and then sends significant wires or checks to other charitable organizations.
  • A nonprofit, its customer, or an employee appears to evade reporting or recordkeeping requirements.
  • A customer receives funds from a charity with no clear business relationship and then withdraws the money in cash or transfers it onward.

Compliance guidance

  • Financial institutions should use the alert’s indicators to detect, prevent, and report suspicious activity linked to Iranian misuse of religious charities.
  • Banks should preserve legitimate charities’ access to transparent financial channels and apply a risk-based customer due diligence approach.
  • FinCEN reiterated the existing Joint Fact Sheet on Bank Secrecy Act Due Diligence Requirements for Charities and Non-Profit Organizations.
  • No individuals, entities, vessels, aircraft, or digital currency addresses were designated in this action.

Source: https://home.treasury.gov/news/press-releases/sb0661/