Treasury Department Issues Advisory to Combat Iranian-backed Terrorist Financing

The US Treasury’s Financial Crimes Enforcement Network (FinCEN) has issued an advisory to help financial institutions detect potential illicit transactions linked to Iran-backed terrorist groups. This move aims to disrupt the flow of funds to these organizations and prevent them from using the global financial system to raise, move, and spend funds.

Methods Used by Terrorist Organizations

The advisory highlights various methods used by Iran-backed terrorist groups to access and circumvent the international financial system. These include:

• Using shell companies and other legal structures to conceal their activities
• Utilizing cash transactions and other unconventional payment methods
• Leveraging relationships with corrupt officials and middlemen to access the financial system
• Employing advanced cyber tactics to evade detection

Warning Signs of Suspicious Activity

Financial institutions are advised to look out for the following warning signs that may indicate suspicious activity:

• Large or complex transactions involving cash or other unconventional payment methods • Transactions involving shell companies, nominee directors, or other legal structures designed to conceal ownership • Relationships with individuals or entities known to have ties to terrorist organizations • Use of advanced cyber tactics or encryption to evade detection

US Commitment to Constraining Iran’s Ability

Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson emphasized that “Iran continues to explore new ways to fund its dangerous and destabilizing activities, including the proliferation of weapons, malicious cyber activities, and financing of terrorist proxies in the region.” The US is committed to constraining Iran’s ability to exploit the international financial system.

Advisory Highlights Iranian Involvement in Terrorist Activity

The advisory specifically highlights Iran’s involvement in and financing of terrorist activity in the region, including its support for groups such as:

• Lebanese Hizballah
• Hamas
• Palestinian Islamic Jihad
• Houthis
• Iran-aligned militia groups in Iraq and Syria

Full Advisory Available Online

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

Call to Action

Financial institutions are urged to take heed of the advisory and remain vigilant in identifying and reporting suspicious activity related to these terrorist organizations. By working together, we can disrupt the flow of funds to terrorist organizations and prevent them from using the global financial system to further their nefarious activities.