Banking and Finance Law Daily Wrap Up, BANK SECRECY ACT—FinCEN identifies Iranian charity red flags, requests filing key term, (Oct 16, 2026)
FinCEN asked institutions to place “FIN-2026-IRANCHARITYABUSE” in Suspicious Activity Report field 2 and the narrative when referencing its alert on potential charity abuse.
The Financial Crimes Enforcement Network (FinCEN) issued an alert identifying four red flags to help financial institutions detect, prevent, and report suspicious activity potentially involving Iranian abuse of religious charity networks (FIN-2026-Alert008, Oct. 15, 2026). The indicators cover activity even when Iran’s direct involvement is not readily apparent from transaction details. FinCEN cautioned that no single red flag establishes illicit or suspicious activity and said institutions should assess the totality of available facts and circumstances. It also requested a designated key term in related Suspicious Activity Reports (SARs).
The alert describes khums as the practice of donating one-fifth of a person’s surplus annual income to religious institutions to fund social and religious programs. FinCEN said that, in some cases, organizations collect khums for prominent Iranian ayatollahs with regime ties or for the Supreme Leader. Those organizations may use hawala, cash couriers, or other informal financial channels to remit funds to Iran or Iran-linked actors.
FinCEN said the alert supports Treasury’s Operation Economic Outcast efforts targeting Iran and its financial enablers. The indicators supplement red flags in earlier FinCEN products addressing Iran-backed terrorist organizations and financing to Hamas and its terrorist activities.
Red flags. The first indicator involves a charitable or nonprofit organization that solicits donations but does not appear to provide charitable services or openly supports the Iranian regime or its terrorist proxies through fundraising appeals, social media, or other means. A second covers large donations from an unknown source over a short period, followed by significant wire transfers or checks to other charitable or nonprofit organizations.
A third indicator is a pattern suggesting that a charity, nonprofit organization, employee, officer, or contractor is evading Currency Transaction Report or recordkeeping requirements. Examples include changing or canceling a transaction after learning a report would be filed or structuring multiple cash transactions below $10,000. The fourth indicator involves a customer receiving funds from a charity or nonprofit organization with no clear business relationship and then withdrawing the money in cash or remitting it onward.
Institutions should consider customer history, whether transactions align with prevailing business practices, and whether the customer displays multiple indicators before determining that conduct or a transaction is suspicious, FinCEN said. One indicator alone is not determinative.
Filing guidance. FinCEN requested that institutions include “FIN-2026 IRANCHARITYABUSE” in SAR field 2, the Filing Institution Note to FinCEN, and in the report narrative. It also encouraged institutions that identify potential sanctions violations to notify OFAC through the Disclosure Portal while continuing to submit SARs as appropriate.
The agency emphasized that legitimate charities should retain access to financial services and be able to transmit funds through legitimate and transparent channels. FinCEN also reminded banks to take a risk-based approach to customer due diligence when developing risk profiles for charities and other nonprofit customers. It said that approach is consistent with existing customer-due-diligence and Bank Secrecy Act/anti-money-laundering requirements (see Banking and Finance Law Daily, Nov. 20, 2020).
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