By Kimberly Hayek

The Treasury Department has sanctioned the Iraq-based International Development Bank for Investment and Finance (IDB) and related entities for allegedly giving Iran access to U.S. dollars and supporting the Islamic regime’s proxy terror groups.

The sanctions, announced on Oct. 15 as part of Operation Economic Outcast, hit offshore banks and shadow financiers that moved hundreds of millions of dollars through shell companies and foreign-exchange specialists across the Middle East and Asia, cutting revenue streams Iran has used to support its military and proxy forces.

“The noose is tightening around Iran’s economy, and not even Iran’s so-called allies can save it,” said Treasury Secretary Scott Bessent in the announcement.

“The Department of the Treasury will not relent until the Iranian regime’s coffers are empty and every remaining financial lifeline sustaining its war machine has been severed.”

The bank supplies Iran with financial services and access to U.S. dollars. Iranian firms originally set it up to prop up the country’s economy and deliver dollar liquidity. After U.S. sanctions shut down the nearby Bank Melli, its capital was moved to IDB.

The Treasury also designated Iran-based Jazireh International Bank Company, affiliated with Bank Mellat, and Chabahar International Bank Overseas Company, affiliated with Bank Shahr, for operating in the financial sector of the Iranian economy.

Iranian national Sayyed Ruhollah Razavi, an oil intermediary, was designated for operating in the petroleum sector.

As part of the same operation, Treasury’s Financial Crimes Enforcement Network warned financial institutions to flag possible misuse of religious charities by the Iranian regime, including diversion of tithes called khums.

Officials said the regime has used groups that present themselves as religious in Iran and nearby countries to enrich its leaders, suppress the Iranian people, and finance terrorism overseas.

“Under President [Donald] Trump’s leadership, Treasury will not allow the Iranian regime to continue its long history of abusing religious institutions to line the pockets of its elites and fund terrorism,” Bessent said in an Oct. 15 statement on X.

“By identifying and reporting this potential abuse, financial institutions can provide law enforcement with critical information to isolate the Iranian regime and its financial enablers.”

Bessent rolled out Operation Economic Outcast in late August and labeled it “Economic D-Day.”

The campaign targets the last major economic supports propping up the Iranian government. Treasury has traced the smuggling routes, facilitators, and money channels Iran relies on to sell oil, dodge sanctions, and finance terror. The actions cover nearly 60 companies, people, and vessels linked to the regime’s oil, nuclear, missile, and cyber efforts.

In April, the Treasury Department imposed sanctions on 35 individuals and entities accused of running Iran’s secret shadow banking network. The department has accused the network of transferring tens of billions of dollars to help Iran dodge U.S. sanctions and finance terrorism.

“Iran’s shadow banking system serves as a critical financial lifeline for its armed forces, enabling activities that disrupt global trade and fuel violence across the Middle East,” Bessent said in a statement at the time.

Emel Akan contributed to this report.