FinCEN warns U.S. banks to flag suspected Iranian misuse of religious charities and khums donations

The U.S. Treasury’s Financial Crimes Enforcement Network issued an alert Thursday asking financial institutions to identify and report suspected Iranian misuse of religious charity networks, including the diversion of khums donations.

FinCEN said Iranian-linked networks may use religious organizations and nonprofit groups to move money through informal channels such as hawalas and cash couriers, potentially directing funds to regime-linked actors and proxy groups.

The alert listed several red flags, including charities that solicit donations but provide little visible charitable activity, organizations that openly support the Iranian government or its proxies, unexplained large donations followed by transfers to other nonprofits, and efforts to avoid reporting or recordkeeping requirements.

Treasury said some organizations collecting khums may do so on behalf of prominent Iranian ayatollahs with ties to the government and then remit the funds to Iran or Iran-linked actors.

FinCEN said legitimate charities should continue to have access to financial services and instructed banks to use a risk-based approach rather than treating religious or nonprofit organizations as inherently suspicious.

The alert is part of the Treasury Department’s broader Operation Economic Outcast campaign targeting Iranian sanctions evasion, shadow banking and financing networks.