Trump Administration Increases Sanctions Pressure On Iran Through “Operation Economic Outcast”

The Trump Administration launched “Operation Economic Outcast” on Monday, August 24, 2026, expanding U.S. economic sanctions targeting additional sectors of Iran’s economy in an effort to weaken the Iranian regime and drive a wedge between Iran and the countries with which it has continued to trade. U.S. Secretary of the Treasury Scott Bessett announced this as an “an economic onslaught against Iran’s financial connections around the globe” and an effort “to sever every economic lifeline” that sustains the Iranian regime.

The most notable development is the explicit threat to impose sanctions on individuals, companies, and governments located anywhere in the world who continue to conduct or facilitate activity with Iran across an increased range of economic sectors (such sanctions are referred to as “secondary sanctions”). The announcement did not name any specific secondary country targets, thereby preserving the Administration’s flexibility to increase pressure over time on parties that continue to do business with Iran. However, Secretary Bessett said that while the Administration had privately given timelines to certain countries, he stated that the United States will not “have infinite patience.”

In addition to these expanded secondary sanctions, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) took several concrete steps to expand or reinforce U.S. sanctions including suspending indefinitely the existing general licenses that had permitted certain educational and sports activities; adding sixty more individuals, entities, and vessels to the Specially Designated Nationals (“SDN”) List for blocked parties; and reaffirming its warning that those who engage with the Iranian regime to provide anything of value in exchange for “safe passage” through the Strait of Hormuz would violate U.S. sanctions.

Summary of Key Actions:

• Expanded Secondary Sanctions in Key Economic Sectors: The Administration issued a determination pursuant to Section 1(a)(i) of Executive Order 13902 adding five more sectors of the Iranian economy – Aviation, Digital Assets, Gold, Shipping, and Technology – to the list previously including the Construction, Mining, Manufacturing, Textiles, and Financial sectors as subject to sweeping sectoral sanctions. These additional sectors were targeted for their use by the Iranian regime as avenues for evasion of U.S. sanctions and facilitating Iran’s military and weapons programs. Any person anywhere in the world operating in, engaging in any significant transaction with, or providing any assistance to anyone operating in those sectors may be designated as a blocked party under U.S. secondary sanctions.
• Suspension of Education-Related General Licenses: OFAC has suspended indefinitely the existing general licenses in the Iranian Transactions and Sanctions Regulations (“ITSR”) and General License G that permitted U.S. universities and other U.S. persons to participate in certain educational activities including academic exchange programs with universities in Iran, providing certain educational services to people in Iran (g., in connection with individuals in or ordinarily resident in Iran becoming students or teachers at a U.S. university), participating in certain educational or research activities at universities in Iran, and providing certain non-profit educational services in Iran (such as programs combatting illiteracy). There is a very short wind-down period (until September 8) for existing activities. Activities after this wind-down period ends will require specific OFAC authorization.
• Suspension of Sports-Related General License: OFAC suspended indefinitely the existing General License F that had permitted U.S. persons to provide services in support of professional and amateur sports activities and exchanges involving Iran. There is a very short wind-down period (until September 8) for existing activities. Activities after this wind-down period ends will require specific OFAC authorization.
• Suspension of General License for Conferences: OFAC suspended indefinitely the existing ITSR general license that had permitted the provision of services related to conferences in the United States or in third countries. There is a very short wind-down period (until September 8) for existing activities. Activities after this wind-down period ends will require specific OFAC authorization.
• Prohibitions on Remittances: OFAC suspended the ITSR general license that had permitted certain non-commercial, personal remittances to or from persons in Iran. There is a very short wind-down period (until September 8) for existing activities. Activities after this wind-down period ends will require specific OFAC authorization.
• Additional SDN Designations: OFAC sanctioned over 60 entities, individuals, and vessels. Secretary Bessett described these targets as those that “enable the Iranian regime to procure illicit nuclear and missile technology, conduct cyber operations, and generate oil revenue.”
• Updated Guidance on Sanctions Risks for Strait of Hormuz Passage: OFAC updated its May 2026 alert regarding the Strait of Hormuz to emphasize that both U.S. and non-U.S. persons anywhere in the world risk being sanctioned if they engage with Iran or various other entities (e., the “Persian Gulf Strait Authority,” “Persian Gulf Marine Insurance Company,” and “HormuzSafe Marine Services Authority”) to obtain guarantees of safe passage through the strait, even if there is no direct payment or other exchange of value. OFAC’s updates reiterate the Administration’s views that that not only paying tolls but also soliciting or receiving “services” as well as engaging in a range of other conduct as violations of the U.S. embargo on Iran.

These recent actions represent a continued escalation of U.S. sanctions efforts targeting Iran both rhetorically and in substance by attempting to further economically isolate Iran by deterring activity with third countries. These actions will inevitably be followed by a continued, substantial focus on enforcement.

Institutions and persons that have been operating under any of these suspended general licenses should immediately take steps to cease Iran-related activities under those licenses and document those efforts, given the limited time to wind down their activities. Companies with international affiliates, partners, or supply chains with potential exposure (including through third parties) to the affected sectors in the Iranian economy should immediately engage with those parties to assess and mitigate the compliance risks presented. Further, companies can use this opportunity to refresh their assessment of sanctions risk exposure, review their compliance with general licenses and OFAC authorizations, and enhance their sanctions and export compliance controls. For further assistance understanding the impact of and complying with U.S. sanctions, please contact the Foley Hoag International Trade & National Security group.