US sanctions Turkish bank as Iran financial crackdown widens

On Monday, August 24, Treasury Secretary Scott Bessent announced Washington's new campaign against Iran's regime: Operation Economic Outcast. The objective, in his words, is "to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone."

More than 60 entities, individuals and vessels were designated in the first round. But among all the institutions Bessent named, one stood out: Bank Melli, one of the Iranian state's largest banks, was the only one whose every foreign branch, he said, "must be shuttered and dark."

Bessent also issued a warning to anyone tempted to help: "Any entity that facilitates money laundering on behalf of Iran will be removed from the U.S. dollar system. The clock just started ticking."

Britain has made a narrower accusation. It designated Bank Melli's London subsidiary under its Iran nuclear sanctions regime, and nothing in the bank's UK filings alleges money laundering. Two governments reached the same bank by different legal routes.

Eleven months after Britain sanctioned it, Melli Bank plc still holds a British banking license. It still seats a board, still meets a payroll in London, still files audited accounts. Every asset frozen, every new customer barred, and it remains a bank. Shuttering it is a separate act, and Britain is the only government that can perform it.

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  Iran or the dollar? US makes an example of Banque Misr

A British bank, owned by the Islamic Republic

Bank Melli operates branches and subsidiaries in about ten countries and territories, from the United Arab Emirates to Germany. Its London operation is a company in its own right: Melli Bank plc is registered in England, with a full banking license from Britain's financial regulators, the same authorities that supervise Barclays and HSBC.

Every share of it belongs to Bank Melli Iran, which belongs to the Iranian state. Until April 2026, the chairman of its London board was simultaneously the chief executive of the parent bank in Tehran.

Being a British company comes with a British obligation: publishing audited financial statements for anyone to read. The latest set, 54 pages covering 2025, was filed with the UK corporate registry in June. It amounts to something rare: an inside view of a regime-owned bank as the walls close in.

The accounts also leave no doubt about what the bank was for. Its core business for four decades was financing trade between Iran and Europe, mainly through letters of credit, the standard instrument that guarantees payment in cross-border trade.

The bank's own filings call Iran its "niche market" and say about 92% of its revenue was earned in euros, in what it calls the Eurozone–Iran trade corridor. A €363 million institution, with €258.8 million in capital that ultimately belongs to the Iranian state, existed inside the British financial system to keep money flowing between Iran and Europe.

And business was good, right up to the end. In 2024 the bank recorded its best profit since 2014, €2.4 million. In 2025 its fee income from trade finance surged another 71%, a boom cut short in late September, when the sanctions arrived.

What a severed lifeline looks like

In August 2025, Britain, France and Germany triggered the UN "snapback." The restored sanctions took effect on September 28. The next day, Britain and the European Union sanctioned Melli Bank plc itself.

Since then, the bank has been forbidden from writing a new loan or taking a new customer. Its own accounts describe what remains as the "orderly management" of existing assets and liabilities in a controlled, non-trading environment.

The numbers show what that means in practice:

• The bank holds about €98 million in deposits that it is not licensed to repay, even as €88 million of them come due. Most of that money belongs to Iranian financial institutions that are themselves under sanctions. Sanctioned depositors, sanctioned bank: the money is simply locked between them.
• €71 million of the bank's own money is stuck at other banks that hold its accounts, unavailable "due to external restrictions." What the bank can actually reach is about €30 million.
• Iranian banks owe it €36.5 million in payments that fell overdue during 2025. A year earlier, that figure was zero.
• Nearly three-quarters of its assets, €259.9 million, are claims on Iran, mostly money owed by Iranian banks. These are the assets that have to go somewhere if the bank stops existing.

The bank's British auditor has formally warned of "material uncertainty" over whether it can continue as a going concern. Its Hong Kong staff left in January when a payment license for their salaries failed to arrive in time. Layoffs began in London in December.

The Tehran representative office is closing. Four board members have departed in little over a year; three remain. Yet seniority still pays: total board compensation rose to €905,000 in 2025, and the highest-paid director received a €615,000 package including rented housing, a company car and private health insurance, in the same year the bank booked €1.26 million in severance costs.

What keeps the lights on at all is a permission slip. A general license from the UK Treasury, issued three and a half weeks after the designation, allows exactly four kinds of payments: wages and severance for its UK-based staff and directors, their pensions, IT bills, and the accountant's fee.

Every month the bank must report every payment it makes, line by line, to the Treasury. Even its lawyers require a separate license; legal and professional costs jumped 57% last year to just over €1 million, more than five times the bank's entire 2025 profit of €181,000, itself down 92% from the year before.

Britain's decision

On August 25, the day after Bessent spoke, Britain's Chancellor John Healey welcomed Operation Economic Outcast, noting that Britain has imposed more than 240 sanctions on Iran since Labour took office in 2024 and pledging to work with Washington on economic pressure.

Britain had sanctioned Melli Bank plc eleven months earlier on grounds of its own, under a nuclear regime unrelated to the money laundering Bessent alleges. The endorsement answers a different question: on the objective, Britain is with Washington.

That question has been open since the war began, with American officials making little secret of their view that British cooperation has run behind Washington's expectations. Melli Bank plc offers a cheap way to close the gap. The bank has been barred from trading since September. Its depositors are overwhelmingly sanctioned Iranian institutions. Its staff is already leaving. Letting the license expire hands Washington a closed bank at almost no cost to Britain.

Britain sanctioned the bank in September 2025, and weeks later the Treasury granted it Interim Necessities General Licence INT/2025/7628424. Renewal followed in April 2026. Every British and European sanction on Melli Bank plc that is in force today was in force then. Washington announced Operation Economic Outcast four months later, on August 24. The license expires on October 22.

The bank expected the signature to come again. Citing legal advice, its accounts say it anticipated renewal, and it behaved accordingly: it had added a new board member weeks before snapback, signed a new Hong Kong office lease a month after being sanctioned, and planned to rehire staff there by this summer.

Its report contains no wind-down plan, no closure scenario, and not a word about what happens to the €98 million in deposits or the €258.8 million in capital if the license lapses.

If the license lapses, the bank cannot lawfully pay its staff or its auditors, and an English company that cannot pay its auditors does not remain a going concern. Insolvency would put Melli Bank plc in front of a British court, which would have to decide what becomes of €98 million owed mostly to sanctioned Iranian banks and €258.8 million of capital belonging to the Iranian state.

Neither the bank nor the Treasury has said what that process would look like. The difficulty of it is the best reason the Treasury has to sign again. Insolvency would release nothing, though: sanctioned money stays frozen whoever administers it.

A freeze is a pause, and this bank has lived through one. The European Union sanctioned Melli Bank plc in 2008. The nuclear agreement lifted those sanctions in 2016, and the bank went back to financing Iranian trade, on its way to its best year since 2014. Everything imposed on it since 2025 could come off the same way, in a deal. Closure ends that.

A surrendered license, distributed capital and a dispersed staff leave nothing to restart, and any future British government minded to have this bank back would have to authorize an Iranian state-owned bank from the beginning.

That is what makes this obscure bank in London worth watching. Operation Economic Outcast rests on a claim that a regime's financial lifelines can be cut in practice. Melli Bank plc shows the machinery running end to end: international snapback, allied designations, a frozen balance sheet, a departing staff, and one administrative decision standing between a regime-owned bank and closure.

On October 22 the Treasury has two options. It can sign the license again and keep Melli Bank plc alive, or let it lapse and close a British bank owned by the Iranian state. Bessent said the clock just started ticking. In London, it already has an alarm set.

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This report is based on Melli Bank plc's Annual Report and Financial Statements for 2025 and prior years, filed at the UK's Companies House (company no. 04152338); the Companies House register of directors; the UK Sanctions List entry for Melli Bank plc under the Iran (Sanctions) (Nuclear) (EU Exit) Regulations 2019; the UK Treasury's Interim Necessities General Licence INT/2025/7628424 and its Legal Services General Licence INT/2025/7323088, both published on gov.uk; Council Decision 2008/475/EC, which first listed the bank in the European Union, and the delistings of January 2016 under the nuclear agreement; Treasury Secretary Scott Bessent's remarks of August 24, 2026, announcing Operation Economic Outcast; the UK Chancellor's statement of August 25, 2026; and Iranian press reporting on the removal of Abolfazl Najarzadeh as chief executive of Bank Melli Iran.

Iran International also found that US investigations into some banks were years behind the activities of the network, which expanded across multiple countries and moved billions of dollars for Iran despite sanctions.

The investigation was based on leaked internal correspondence and foreign transaction records from Bank Parsian spanning November 2022 to May 2023. The Iranian bank has been under US sanctions since 2018.

These documents shed light on a multi-layered operation within Iran’s banking system. The records offer only a snapshot of one network over a seven-month period, suggesting the full scale is far greater.

Iran International found no evidence that the banks in the UAE and China knowingly facilitated Iran’s efforts to circumvent US sanctions.

The investigation identified 15 foreign-based banks that helped Iran conduct international transactions in recent years.

Thirteen of these banks have faced no US penalties or enforcement for their involvement, according to publicly available records.

Only two of the 15 banks were targeted by the United States in August as part of the “D-Day” economic campaign which Washington described as an onslaught against Iran’s financial connections around the globe.

On August 24, US Treasury Secretary Scott Bessent called on all governments to close branches of Bank Melli Iran.

Four days later, the Treasury proposed cutting Banque Misr’s UAE operations off from correspondent banking access to the US financial system.

Treasury estimates that from 2024 to 2026, Banque Misr UAE processed approximately $1.8 billion for 103 companies that are potentially part of Iranian shadow banking networks.

However, documents reviewed by Iran International showed that funds originating from Iran’s central bank were being directed to accounts at Banque Misr’s UAE branches as early as November 2022.

Banque Misr and Bank Parsian did not respond to requests for comment.

China and UAE

Iranian banks use intermediaries to move foreign currency outside the country while obscuring their involvement in transactions, according to the US Treasury. Brokers working for the banks use so-called “rahbar” companies, which in turn rely on overseas shell and front companies to bypass sanctions.

The leaked documents showed funds belonging to Iranian banks being deposited into accounts outside Iran — referred to in the records as “trustee accounts” — and then moved according to the Iranian banks’ instructions.

At each stage, identifying details disappeared, leaving foreign banks facing non-Iranian, mostly non-sanctioned trading companies rather than sanctioned institutions such as Bank Parsian, Bank Shahr or Iran’s central bank.

A May 22, 2023 letter from Bank Parsian showed the bank asking Bank Shahr, another Iranian lender, to arrange the “settlement of purchased dirhams of nominee origin.”

The letter said Bank Parsian had bought 3.06 million UAE dirhams from Iran’s central bank and that the funds were held in a “trustee account” at Bank Shahr. It asked Bank Shahr to transfer the money to an account at Banque Misr.

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“What keeps the regime’s shadow banking network, the so-called rahbar network, running is not clever financial engineering. It is people: trusted individuals and a handful of sarrafis, the currency brokers who serve as the regime’s gateway to the global financial system,” said Miad Maleki, a former senior Treasury official now at the Foundation for Defense of Democracies think tank.

“Just as IRGC soldiers carry out the regime’s repression at home, these businessmen and trustees carry the responsibility for funding its terrorism at home and abroad. Without them, Tehran could not move a single yuan out of its accounts in China or buy a single dollar or euro in Dubai or Istanbul,” he added.

Iran International identified 33 instruction letters in the leaked documents that directed the movement of dirham, yuan and dollars, with a total value of roughly $36 million.

Dollars made up the largest share of the value transferred, meaning the dominant currency in this shadow network was still the one US sanctions are designed to control.

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UAE and China

The US Treasury described Banque Misr UAE as “a critical node for the Iranian regime’s access to U.S. dollars.”

Banque Misr was the most frequent UAE destination for Bank Parsian’s foreign transactions, the documents showed, but seven other banks operating in the Arab state also appeared in the records, including some of the UAE’s largest lenders.

The documents showed the transactions took place between 2022 and 2023, years after Bank Parsian was designated under an executive order targeting terrorism financing.

Thirteen UAE-registered companies also appeared as beneficiaries across these eight banks. Five of them held the Banque Misr accounts.

Iran International also identified seven Chinese banks that received money on behalf of Iran.

The leaked documents include 23 letters from Bank Parsian involving yuan-denominated transactions with Chinese banks, including some of the country’s largest lenders by assets.

One Chinese bank that specialises in cross-border settlements for small exporters received 11 payment instructions from Bank Parsian according to the documents.

Most of the beneficiary firms were general trading companies registered in Hong Kong and Singapore, where companies can be established relatively easily, while receiving banking services from mainland China.

None of the seven Chinese banks identified in the documents has faced US enforcement action over its dealings with Iran.

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Tip of the iceberg

Bessent said in August that the department had "mapped the networks, facilitators, and financial channels that Iran uses to smuggle oil, evade sanctions, and fund terror."

President Donald Trump also said in a post on Truth Social that “ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences.”

His warning included cash transfers, exchange houses and front companies.

However, U.S. sanctions have tended to focus more heavily on Iran’s oil-revenue and procurement networks than on correspondent banking and trade finance.

The Iran International investigation reveals the scale of what remains untouched by the US administration. The leaked files show that one Iranian bank, in seven months, directed money to 15 foreign-based banks in two countries through 33 beneficiary companies.

Out of 33 beneficiaries, only three have been publicly identified by the US Treasury.

The transactions identified by the investigation were carried out by Iranian financial institutions that were already under US sanctions when the instruction letters were issued.

Throughout that period, the Iranian institutions at the heart of the network - including the Central Bank of Iran, Bank Parsian, Bank Shahr, Bank Eghtesad Novin, Bank Saman, and Bank Melli - were already under extensive US sanctions. Yet the money continued to move, largely through financial institutions outside Iran.

Section 311

Washington has stopped short of targeting larger financial institutions, particularly major Chinese banks involved in financing Iranian trade, a step Washington has so far avoided amid concerns over wider financial disruption and retaliation.

Hours after the United States sanctioned dozens of Chinese entities and threatened to target an unspecified “major financial institution” over its dealings with Tehran, Beijing said in a threatening tone that its relationship with Iran “should not be disrupted or undermined.” China would take “all necessary measures” to safeguard its interests, Foreign Ministry spokesperson Lin Jian warned.

Washington has begun targeting the banking channels used by Iran’s shadow network through a more targeted tool, Section 311 of the USA Patriot Act, which can restrict foreign financial institutions’ access to the US financial system.

Unlike a sanctions designation, a Section 311 finding does not require the Treasury to show that the bank knowingly handled Iranian money — which may be why it was the instrument chosen.

Banque Misr’s UAE operations were targeted under Section 311 as part of the economic D-Day campaign.

“What makes this package different is that it isn’t operating alone. US diplomatic engagement and pressure on jurisdictions like the UAE, Turkey — and even China, is now coupled with a blockade that is choking off a large share of the imports Iran uses these networks to finance,” former Treasury official Maleki said.

“Together, that accelerates what sanctions alone would take years to do. And the regional calculus has shifted: jurisdictions that have themselves been targeted by the regime are far more willing to cooperate on enforcement — as the UAE just showed,” he added

Washington has signaled that further action against foreign banks is coming.

Whether Washington’s D-Day economic campaign succeeds will depend heavily on enforcement beyond Iran, including action against foreign institutions facilitating Iranian transactions, many of which are based in partner countries or strategic rivals.

Iran exported about $15 billion worth of non-oil goods, including natural gas and LPG, through August 16, nearly five months into the Iranian calendar year that began on March 21. That was nearly 30% below the figure reported for the first five months of the previous year.

Imports fell to about $17 billion over the same near-five-month period, about a quarter below the full five-month figure reported a year earlier.

The figures show a sharp deterioration in Iran’s trade during a conflict that has disrupted key industries and shipping routes, adding to an economy already struggling under years of sanctions, declining oil revenues and chronic shortages of foreign currency.

The United States has intensified economic pressure on Tehran since the conflict began on February 28, while imposing a maritime blockade on Iran amid disruptions to shipping through the Strait of Hormuz.

Iranian customs authorities have not published a detailed breakdown of the decline in non-oil exports. But the latest figures indicate that non-oil exports have fallen for a second consecutive year, with the current near-five-month total roughly a third below the level recorded in the first five months of 2024.

Imports have performed even worse over the longer period, with the latest total nearly 40% below the first-five-month figure recorded in 2024.

Petrochemicals and steel hit by strikes

The deterioration comes after attacks disrupted two of Iran’s most important non-oil export industries: petrochemicals and steel.

Iran exported about $45 billion in non-oil goods during the previous Iranian fiscal year, with petrochemicals and steel accounting for roughly $17 billion, or 37% of the total.

Israeli strikes in March hit Iran’s major petrochemical hubs in Mahshahr and Asaluyeh, as well as major steel producers including Mobarakeh Steel and Khuzestan Steel.

The Iranian government subsequently halted the export of a wide range of petrochemical and steel products for two to three months. Some export permits were later restored, but the government has not disclosed how much these industries exported during the first five months of the current year.

That makes it difficult to determine precisely how much of the overall decline in non-oil exports was caused by disruptions to these sectors.

But given their importance to Iran’s export earnings, any prolonged disruption to production, transportation or overseas sales would have a significant effect on the country’s trade balance.

Oil exports fall even faster

The decline in Iran’s oil exports appears to have been even steeper.

Iranian customs authorities do not publish oil-export figures. Kpler data seen by Iran International, however, show that Iran’s average daily crude-oil and condensate sales to China during the first five months of the current Iranian year were slightly above 1 million barrels per day, about 40% below the same period last year.

Iran’s total fuel-oil exports to international markets also fell sharply, averaging about 96,000 barrels per day, down 57% year on year.

The decline has accelerated in recent months.

Iran’s oil shipments to China, its main customer, have fallen to roughly 520,000 barrels per day this month, while the average over the previous two months was about 800,000 barrels per day, according to Kpler estimates.

That compares with roughly 1.7 million barrels per day of crude oil and condensate sold to China at the beginning of the conflict.

Iran’s fuel-oil exports have also dropped from an average of about 220,000 barrels per day at the start of the war to 61,000 barrels during August.

The collapse in fuel-oil exports has also coincided with a sharp deterioration in Iran’s trade with the United Arab Emirates.

The UAE was Iran’s largest fuel-oil customer last year, accounting for more than 70% of Iran’s fuel-oil exports. But following widespread Iranian attacks on the UAE, the trade has been almost suspended.

Malaysia, Singapore and China have also largely stopped buying Iranian fuel oil since the beginning of the conflict.

Mounting pressure on Iran’s economy

The combined decline in oil and non-oil exports is likely to put further pressure on Iran’s already strained foreign-exchange position.

At the same time, the fall in imports suggests that Iranian companies and consumers are facing increasing difficulty accessing foreign goods, raw materials, machinery and intermediate products.

The trade figures therefore point to a broader deterioration than a simple decline in exports. Iran is simultaneously losing export revenue and reducing its ability to import the goods needed to sustain domestic production.

If the decline in oil shipments persists, pressure on Tehran’s foreign-currency reserves and its ability to finance imports could intensify further in the coming months.

For an economy heavily dependent on oil revenue and imports of industrial inputs, the latest figures suggest that the economic costs of the conflict are extending well beyond the energy sector.

“Are Trump’s sanctions targeting the Iranian people or Islamic Republic officials? We are looking for a way to escape this situation, but it seems all the doors of the world have been closed to us,” one citizen wrote.

Iran International asked its audience to share their experiences of barriers to studying abroad after new sanctions led to restrictions affecting international language tests for Iranians.

An analysis of responses on Instagram showed that the cost of studying and moving abroad, compounded by the falling value of Iran’s currency, and the cancellation of international language tests were the most frequently cited concerns.

The US Treasury Department’s Office of Foreign Assets Control, or OFAC, indefinitely suspended General License G on August 24 as part of the Trump administration’s latest campaign to intensify economic pressure on the Islamic Republic.

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The license had since 2014 provided the legal basis for US universities, testing companies and other American entities to offer a range of educational services to Iranian people.

The Duolingo English Test subsequently announced that it would stop providing services from September 1 to people residing in Iran and holders of Iranian identification documents.

Rising costs narrow options

Financial pressures were the most common concern raised in responses to Iran International.

Respondents cited the rising cost of foreign currency, language tests, university applications, tuition, airline tickets and exit bonds as major obstacles to pursuing education overseas.

“With the euro at 2,400,000 rials, visas not being issued to Iranians, war and rising prices, the very high cost of exit bonds, terrible airline ticket prices, internet problems and language tests are all barriers to migration for us in Iran,” one respondent wrote.

Another described being caught between the expense of leaving Iran and the cost of remaining.

“We are imprisoned in Iran. We have neither the money to leave Iran nor the money to live in it,” the respondent wrote.

Some respondents also pointed to rising living expenses after reaching their destination countries, adding another financial hurdle even for those able to secure admission and leave Iran.

Years of preparation disrupted

The suspension or restriction of international language tests was the second major theme to emerge from the messages.

Some respondents said they had switched to TOEFL or the Duolingo English Test after IELTS became unavailable at various periods in Iran, only to see those alternatives restricted as well.

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“After several years of studying for TOEFL, getting a high GPA and working to build a good résumé, I was one step away from taking TOEFL, and now the test is no longer being held,” one respondent wrote.

Another said the cancellation of a TOEFL exam was announced on the morning it was due to take place, after years of preparation and with an embassy appointment approaching.

The Duolingo English Test, launched in 2016, has become an alternative to TOEFL and IELTS for some Iranian applicants. The online test can be taken from home and costs less than some other international English proficiency exams.

Several respondents said the latest restrictions showed how sanctions were affecting ordinary Iranians seeking academic opportunities abroad.

“Why should ordinary people be targeted by sanctions? People in Iran are not allowed to take TOEFL and Duolingo tests inside Iran; they are not even allowed to escape this country,” one respondent wrote.

Iranian passport adds to barriers

Some identified their Iranian nationality and passport as another obstacle to academic opportunities abroad.

They described university positions being closed to Iranian applicants or applications being rejected without what they considered serious consideration of their academic records.

“I think the first problem for many people in Iran who want to migrate is the financial cost, followed by the barriers to being accepted as an Iranian,” one respondent wrote.

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  Iran sanctions reach education: Duolingo blocked, TOEFL and GRE in doubt

Another pointed to lengthy security screening of Iranian applicants at embassies, saying delays can prevent students from reaching universities in time to begin their programs.

Internet disruptions cost opportunities

Internet restrictions inside Iran were another recurring concern in the messages, particularly because applications depend on access to university websites, email and international financial services.

One said Iran’s internet was cut off on January 8, a day after an admissions interview with a university in Britain.

The respondent said two weeks without access to email or the university’s website ultimately resulted in the loss of the study opportunity.

The US Treasury Department’s Office of Foreign Assets Control, or OFAC, indefinitely suspended General License G on August 24 as part of the Trump administration’s latest campaign to intensify economic pressure on the Islamic Republic.

The license had since 2014 provided the legal basis for US universities, testing companies and other American entities to offer a range of educational services to Iranian people.

OFAC has allowed transactions necessary to wind down activities previously covered by the license until September 8. After that, services that are otherwise prohibited under US sanctions would require another applicable authorization or a specific license from the Treasury Department.

The change does not in itself mean that every international examination will immediately disappear for Iranian applicants. But its first effects are already becoming visible, while uncertainty is growing over tests widely used for university admissions and professional qualifications.

A broad education exemption

General License G, issued under the Obama administration on March 20, 2014, covered far more than university exchange programs. It allowed US institutions to process applications from people in Iran, accept application fees and tuition, establish student exchange agreements with Iranian universities and offer certain online courses.

One provision specifically authorized US persons anywhere in the world to administer professional certification and university entrance examinations, including standardized multiple-choice tests, to people in Iran and to people abroad who were “ordinarily resident in Iran.” It also covered services required for admission to US universities.

That wording gave American testing organizations a broad sanctions exemption for services potentially including exams such as TOEFL and GRE.

Its suspension was part of a much larger package launched under what the Treasury Department calls Operation Economic Outcast. OFAC indefinitely suspended five authorizations in total, covering General License G, US-Iran sporting activities, some educational activities in third countries, certain personal remittances and services connected with conferences.

Treasury Secretary Scott Bessent described the broader campaign as an “economic onslaught” against Iran’s international financial connections, saying Washington aimed to “sever every economic lifeline” sustaining the Islamic Republic.

Duolingo becomes the first clear casualty

The clearest immediate impact has come from the Duolingo English Test, an online English-language examination accepted by thousands of universities.

Duolingo’s official support page now states that its English test is “unavailable in Iran and for users with Iranian IDs.”

The wording is significant because the restriction is not limited to people physically inside Iran. Someone who travels from Tehran to Istanbul, Dubai or Yerevan but relies on an Iranian identity document would still fall under the policy.

That has fueled frustration among Iranian students, many of whom already face significant obstacles in applying to universities abroad.

Persian-language social media users responded with anger and dark humor. One user whose post was republished by the Telegram channel University of Tehran Twitter wrote: “It really feels like they’re competing over who wants us less.”

Another, reacting to reports about both TOEFL and Duolingo, wrote that Iranians were effectively being “excluded from the human species.”

A third mocked repeated assertions that US pressure is aimed at the Iranian government rather than ordinary citizens: “They canceled TOEFL because people were making hypersonic missile origami out of the test papers. Otherwise, of course, they have no problem with the Iranian people.”

A Duolingo-focused Telegram channel went further, jokingly announcing a “funeral for the late Duolingo” in a fictional cemetery next to the “TOEFL and GRE section.”

A Change.org petition launched on August 27 calls on Duolingo to restore a legal route for Iranian applicants, arguing that students should be assessed on their abilities rather than their nationality and urging the company to seek an educational exemption or alternative compliance mechanism.

What happens to TOEFL and GRE?

The future of other major US-administered tests remains less clear.

As of August 29, Educational Testing Service, the US organization behind TOEFL and GRE, had not issued a public announcement saying the exams would no longer be available to Iranians. Iran also remained on ETS’s official list of countries where the TOEFL iBT is offered.

There are, however, signs that availability may already be changing.

Two major Iranian test centers said Saturday that TOEFL iBT and GRE exams had been suspended across Iran, with one saying all ETS tests scheduled for the week had been canceled without prior notice to testing centers and another saying new registrations were unavailable until further notice.

TOEFL Resources, an unofficial specialist website that tracks ETS testing appointments, reported on Saturday that TOEFL slots in Iran had been visible through January just a day earlier. It said only September 5 appointments at two centers outside Tehran were subsequently showing, with later dates no longer available.

That does not yet establish that ETS has permanently withdrawn from Iran. The company could potentially rely on another authorization, seek a specific OFAC license or alter how it provides services.

OFAC itself says companies wishing to continue activities previously covered by the suspended licenses may apply for specific authorization.

For Iranian students, that leaves the immediate picture unsettled. Duolingo access has already been restricted, while the fate of TOEFL, GRE and other academic and professional examinations may depend on decisions by individual testing providers — and on whether the US Treasury grants them a new legal route to continue serving Iranian applicants.

IELTS, which now appears to be one of the few remaining major options for Iranian applicants, is in a different position because it is jointly owned by the British Council, Australia’s IDP and Cambridge University Press & Assessment, rather than a US testing organization.

However, while the suspension of General License G does not directly apply to it, IELTS testing inside Iran had already ended on January 31, 2026, after IDP cited separate “financial and regulatory factors” outside its control, requiring Iranian applicants who want to take the test to travel to neighboring countries.