The US Treasury’s latest warning over Iran’s alleged abuse of religious charities puts renewed attention on religious and charitable organizations outside Iran that have separately faced criminal, regulatory or government scrutiny over financial or institutional links to Tehran.
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) on Thursday issued an alert asking financial institutions to report potential Iranian government abuse of religious charity networks, including the diversion of khums, a religious levy paid by Shiite Muslims.
Treasury said organizations collecting such payments may act on behalf of prominent Iranian ayatollahs with ties to the government and may use informal financial channels, including hawala networks and cash couriers, to transfer money to Iran or Iran-linked actors.
“Under President Trump’s leadership, Treasury will not allow the Iranian regime to continue its long history of abusing religious institutions to line the pockets of its elites and fund terrorism,” Treasury Secretary Scott Bessent said.
FinCEN identified several red flags, including charities soliciting donations without apparent charitable activity; organizations receiving large donations from unknown sources over a short period before transferring significant sums to other nonprofits; attempts to evade reporting or recordkeeping requirements; and recipients with no clear business relationship to a charity withdrawing its transfers in cash or sending them onward.
The alert also says no single indicator establishes illicit or suspicious activity.
The alert does not identify specific religious centers in the United States or Europe as participants in the conduct described. But US and European authorities have previously investigated organizations with alleged institutional or financial links to the Islamic Republic.
These cases involved different allegations and legal proceedings and should not be treated as equivalent evidence of diverted religious donations.
Khums case in the United States
A US criminal case cited in the alert involved khums payments collected for transfer to Iran without the required US Treasury licenses.
In 2024, Muzzamil Zaidi and Asim Mujtaba Naqvi pleaded guilty to conspiring to violate US sanctions by collecting tens of thousands of dollars for transfer to Iran, including funds collected in the name of then-Supreme Leader Ali Khamenei.
According to the Justice Department, Zaidi received permission in 2018 to collect khums on behalf of several clerics. Zaidi and Naqvi subsequently collected religious payments as well as donations purportedly intended to help victims of the war in Yemen.
Prosecutors said the men arranged for money to reach Iran and Khamenei’s office by using friends, relatives and other associates to carry cash out of the United States. In one instance, 25 travelers on a religious pilgrimage to Iraq carried dollars that were subsequently taken to Iran. The amounts were structured below $10,000 to avoid scrutiny, according to court documents.
FinCEN cited the Zaidi and Naqvi prosecution in Thursday’s alert as an example of illicit transfers involving khums payments.
Alavi Foundation’s long-running US case
The broader question of Tehran-linked financial activity in the United States has also surfaced in the long-running litigation surrounding the Alavi Foundation and the 650 Fifth Avenue office tower in Manhattan.
US prosecutors alleged in the case that entities associated with the property concealed an ownership interest held by Iran’s state-owned Bank Melli. The litigation ultimately ended in a global settlement that the Justice Department announced in March 2026 would provide approximately $318 million to victims of Iran-sponsored terrorism.
Alavi admitted no liability or wrongdoing under the settlement and rejected allegations that it had operated as an agency or instrumentality of the Iranian government. The foundation said all claims against it and its properties were dismissed with prejudice and that it transferred its assets, including its interest in 650 Fifth Avenue, to a newly created, IRS-approved public charity and would cease operations once its affairs were wound down.
Scrutiny in Britain
Britain’s Charity Commission has separately taken regulatory action involving the Islamic Centre of England, a Shiite religious institution in north London.
The Charity Commission opened a statutory inquiry in 2022 over what it described as serious governance concerns. The inquiry followed an official warning related to two events at the center in 2020 that eulogized Qassem Soleimani, the former commander of the IRGC’s Quds Force who was under UK sanctions.
The regulator later appointed an interim manager after finding failures by trustees to comply with their legal duties and protect the charity’s assets.
In May 2025, the Charity Commission said it had found misconduct and/or mismanagement during its ongoing inquiry and ordered governance reforms. During the inquiry, a requirement in the center’s governing document for one trustee to serve as the official UK religious representative of Iran’s supreme leader was removed, and the occupant left the role. The regulator said the change addressed concerns about conflicts of interest and an apparent lack of independence.
The trustees disputed some of the regulator’s findings. The Commission also discharged the interim manager after she implemented specified improvements, leaving further reforms to the trustees.
The Commission said at the time that its statutory inquiry remained ongoing.
Germany shut down Khamenei-linked center
Germany banned the Islamic Centre Hamburg, or IZH, and its affiliated organizations in July 2024, saying the organization pursued Islamist extremist goals.
Germany’s Interior Ministry said IZH acted as a direct representative of Iran’s Supreme Leader and sought to bring about an Islamic revolution in Germany. Authorities searched 53 premises in eight German states, and four Shiite mosques were closed as a result of the ban. then-Interior Minister Nancy Faeser said the measure did not apply to the peaceful practice of Shiite Islam.
German authorities subsequently ordered IZH head Mohammad Hadi Mofatteh to leave the country. Hamburg’s domestic intelligence agency identified him as the official deputy of Iran’s Supreme Leader Ali Khamenei in Germany.
Iran protested the German action and summoned Berlin’s ambassador in Tehran.
A focus on financial pathways
Thursday’s US alert does not allege that all Shiite charities or religious centers are conduits for Tehran. FinCEN explicitly said legitimate charities should have access to financial services and instructed banks to use a risk-based approach rather than treating the sector as inherently suspicious.
Instead, the alert focuses on how religious donations can potentially intersect with sanctions evasion and informal financial networks.
The US khums prosecution documented religious payments collected in the United States and cash carried toward Iran for receipt by the Office of Iran’s Supreme Leader. The cases in Britain and Germany are distinct: British regulators raised governance and independence concerns involving a center whose governing document had required a trustee to serve as the supreme leader’s official UK religious representative, while German authorities said IZH acted as the supreme leader’s direct representative.
FinCEN’s new alert asks financial institutions to look for indicators of potential Iranian government abuse of religious charities, including patterns that could indicate funds are being transferred to Iran or Iran-linked actors through informal financial channels.
Iran on Tuesday summoned Britain’s ambassador and threatened to reconsider diplomatic relations after London blamed the IRGC for a suspected plot targeting a US-used airbase and Britain’s intelligence chief warned of growing Iranian threats to military sites.
The confrontation stems from a September 27 security incident near RAF Fairford in Gloucestershire, southwest England. Five British men were initially arrested after three suspicious vans were stopped near the base. Police found gasoline in the vehicles but no explosives.
Two more men, including a dual British-Iranian national, were subsequently arrested. All seven have been released on bail.
US officials told Reuters that the suspected plot involved a possible Iranian drone attack. Trump later said a threat linked to Iran prompted Washington to withdraw its B-1 bombers from Fairford, adding that the United States knew who had made the threat.
The Trump administration believes the Iranian threats were intended to kill US personnel and destroy American aircraft, AP reported Tuesday, citing a US official. British officials have not confirmed that assessment, and it remains unclear whether those arrested near Fairford were connected to the alleged drone threat.
RAF Fairford has been used by US bombers involved in strikes against Iran. Tehran has previously said bases used to attack its territory could be considered legitimate targets.
Fairford fuels Iran-UK confrontation
British Prime Minister Andy Burnham said Monday the suspected plot was “highly likely” coordinated in Iran and “almost certainly” directed by the Islamic Revolutionary Guard Corps. Home Secretary Shabana Mahmood said investigators believed an individual based in Iran was behind the incident.
Britain summoned Iran's ambassador and sanctioned two Iranian nationals over alleged involvement in hostile operations abroad.
Tehran responded Tuesday by summoning British Ambassador Hugo Shorter. Iranian Foreign Ministry official Alireza Yousefi rejected the accusations, demanded evidence and warned that Tehran would “seriously reconsider” bilateral relations if Britain failed to substantiate its claims.
The diplomatic confrontation came as MI5 Director General Ken McCallum warned Tuesday that Iran was increasingly turning its attention to military sites and other “harder targets” in Britain.
McCallum said the Fairford incident was “not unique” and that more than 50 people had been arrested in Iran-linked operations in Britain over the previous 12 months. He said Iranian activity had increasingly extended beyond traditional targets such as opponents of Tehran to Jewish sites and military installations.
Britain, the United States and 27 other countries also backed London's attribution of Iranian involvement in the Fairford incident, saying it followed a broader pattern of alleged Iranian attacks and hostile activity abroad.
Iran has denied involvement in the Fairford incident and rejected British accusations of directing hostile operations in the country.
Britain said on Monday that Iran’s Islamic Revolutionary Guard Corps had “almost certainly” directed a suspected plot targeting RAF Fairford, as it vowed to crack down on Iranian criminal networks, sanctioned two Iranian nationals and summoned Iran’s ambassador.
RAF Fairford in southwest England, which had been used by US bombers to carry out strikes on Iran, became the focus of a major security operation after five British men were arrested nearby in the early hours of Sept. 27 on suspicion of terrorism and explosives offences.
US officials have said the suspected plot involved a drone attack. President Donald Trump said last week that an Iran-linked threat had prompted the United States to withdraw its bombers from the base.
“I can confirm our assessment that it is highly likely to have been coordinated in Iran, almost certainly directed by Iran’s Islamic Revolutionary Guard,” Prime Minister Andy Burnham told parliament.
Iran has denied involvement. Iran’s ambassador to Britain, Seyed Ali Mousavi, on Monday rejected any Iranian role in the suspected plot and said Tehran was willing to cooperate with British authorities investigating the incident, state news agency IRNA reported.
Details of the suspected plot remain limited. The five British men were later released on police bail under what authorities described as stringent conditions. Two other arrested men, including a British-Iranian national, were also released.
Police said petrol was found in vans seized during the investigation but no viable explosive was discovered.
“We will not tolerate these threats on our soil,” Burnham said. “We will crack down on Iran's use of criminal networks, using our full range of powers to target them and their funding streams, and we will bring further sanctions to restrict the capacity of Iran and the IRGC to do us harm.”
Sanctions and diplomatic summons
Foreign Secretary Ed Miliband said he had instructed his department to summon Iran’s ambassador.
“Iran’s continued attempts to undermine the security of the United Kingdom and international partners through its criminal networks, proxy groups and state-backed malign activity is unacceptable,” Miliband said.
Britain also sanctioned Ruhollah Bazghandi and Shahram Ali Reza Tamarzadeh Jakki under its Iran sanctions regime.
The UK’s Foreign, Commonwealth & Development Office said Bazghandi, whom it identified as the IRGC’s head of counterespionage operations, was suspected of planning or conducting espionage for Iran and of involvement in threatening, planning or conducting attacks against people and assets in Britain or other countries.
Jakki was sanctioned for allegedly supporting or assisting activity involving threats, plans or attacks against people outside Iran. Britain described him as a facilitator for the already sanctioned Zindashti criminal network, which it says has been involved in plots targeting Iranian dissidents.
Joint condemnation
Foreign ministries from nearly 30 countries, including the United States, Canada, France and Germany, issued a joint statement condemning “Iran’s use of violent attacks, including the acts of lethal plotting, arson, sabotage, cyber-attacks, and other hybrid activities against us and our partners.”
“The UK has also concluded this event demonstrates the IRGC’s continued willingness to project hostile activity beyond its borders through covert networks and proxy actors,” the statement said.
British authorities have for years accused Iran of involvement in plots and attempted assassinations in Britain using criminal networks and proxies, allegations Tehran has repeatedly denied. Britain said last year that it had identified 20 credible Iran-backed threats to kill or kidnap people based in the UK.
In July, Britain used new state-threat powers to ban support for the IRGC and Harakat Ashab al-Yamin al-Islamiya, or HAYI, a linked group that had claimed responsibility for seven attacks earlier this year targeting sites connected to Jewish and Israeli communities and Persian-language media.
Washington’s new sanctions are unlikely to stop a China–Iran freight train at the border, but may make the route Tehran has turned to under pressure from the US naval blockade costlier and less reliable.
The blockade has sharply restricted maritime trade, while years of sanctions have squeezed Iran’s access to international finance. But not every trade channel had already closed.
Trains carrying goods from China were still reaching Iran before the latest US measures. The question now is whether sanctions on Iran’s railway companies will narrow that remaining route and complicate the flow of goods, including auto parts, carried on it.
Last week, the US Treasury designated three Iranian rail companies: the state-owned Islamic Republic of Iran Railway Company, known as RAI; Raja Passenger Trains Company; and private freight operator Railway Transportation Company.
The department said Iran had turned to rail to sustain trade and transport oil as the maritime blockade took hold.
The sanctions block the US-based property of the designated companies and prohibit US persons from dealing with them, while separate sectoral determinations give Washington wider scope to impose future designations. They do not automatically block every foreign railway, freight company or shipment connected to Iran.
The more immediate effect may be caution among companies involved in the trade. Banks may reject payments. Insurers and equipment suppliers may refuse to handle business involving designated companies. Others may charge higher fees or take longer to process shipments.
None of this would close the railway, but together it could make the route less dependable.
A useful route, with clear limits
The China–Iran rail connection is no longer just a proposal. In September, a block train bound for Iran was reported traveling through Kazakhstan, Uzbekistan and Turkmenistan before entering at Sarakhs.
A train from Xi’an to Iran’s Aprin dry port in 2025 was reported to have taken about 15 days, compared with an estimated 30 to 40 days by sea. Iranian railway officials also reported that 43 freight trains arrived from China in the first nine months of 2025.
Those figures show a route in use, although they do not indicate how much of Iran’s overall trade moves by rail.
Rail can move selected goods, industrial inputs, equipment and containerized cargo faster than shipping by sea. But it cannot replace the volume carried by tankers or bulk freighters.
Treasury says Iran is using rail to help transport oil, but its announcement provides no figures for oil moved this way. There is therefore little evidence that rail is a meaningful substitute for seaborne oil exports.
The new designations could nevertheless complicate the China route. Freight must be coordinated among operators, border agencies and terminals in several countries, making the response of Chinese and Central Asian companies important to how disruptive the sanctions ultimately prove.
Auto parts show where the sanctions overlap
The automotive sanctions create a second pressure point because auto parts from China have traveled to Iran by rail.
In 2025, Iran Khodro reportedly received an all-rail shipment through Sarakhs. The head of the local special economic zone said the route reduced transit and stockpiling time from about 50 days to 15.
Sanctions on automakers and rail operators could therefore put pressure on the same supply chain from two directions.
Procurement and payment may become harder, while freight companies and intermediaries may avoid shipments linked to designated firms.
The impact on car production, however, will depend on what parts are affected, how much stock manufacturers have and whether other suppliers or routes are available.
The trains may run, but at a price
The blockade has squeezed Iran’s maritime options; the rail sanctions raise the risks attached to an overland alternative.
They may not stop the China–Iran connection, but could make it costlier and less predictable by deterring the banks, insurers and logistics firms that keep shipments moving.
How much traffic falls will depend largely on the response of Chinese and Central Asian operators.
For now, the railway remains open. But as Iran leans more heavily on the trade routes still available to it, Washington is trying to make those routes harder to use.
The US blockade and tighter sanctions enforcement are cutting into Iran’s oil income and targeting financial networks that sustain the Islamic Republic, but may still fall short of forcing Tehran into concessions, experts said at an Iran International town hall in Washington.
The discussion, hosted by Fardad Farahzad, brought together Kerri Bitsoff, a former senior official at the US Treasury Department’s Office of Foreign Assets Control (OFAC); Patrick Clawson, the Morningstar senior fellow at the Washington Institute; and Mohammad Machine-Chian, a senior economist and analyst at Iran International.
“The thing about sanctions, if they’re on the books but not enforced, they only hurt the people,” Bitsoff said, arguing that the current US campaign differed from previous rounds by focusing more heavily on enforcement and the financial intermediaries sustaining Iran’s economy.
Blockade bites
Iran faces declining oil revenues alongside damage to its energy infrastructure following the war, raising the prospect of severe economic difficulties during the coming winter, Clawson said.
President Masoud Pezeshkian had acknowledged that Iran could not export oil during the initial blockade, according to Clawson, who said the country subsequently sought alternative routes for limited shipments.
Iran had also relied on oil previously stored aboard vessels and in China, but those reserves were approaching exhaustion, he said.
Damage to natural gas infrastructure could compound the difficulties, potentially forcing greater reliance on mazut, a heavily polluting fuel used for electricity generation.
Iran depends on natural gas for approximately 69 percent of its energy requirements, making disruptions particularly consequential for households and industry, Clawson said.
Machine-Chian estimated that between $21 and $23 billion in export proceeds had not returned to Iran and that the blockade could cost the country another $35 billion in oil revenue.
Hitting financial networks sustaining Iran's leadership
The current campaign differs from previous sanctions because Washington is concentrating on enforcement and the intermediaries sustaining Iran's economy rather than simply announcing additional restrictions, Bitsoff said.
She pointed to restrictions imposed by the United Arab Emirates, measures against Iranian airlines and Turkish action against banks connected to Iranian transactions.
Such measures could influence officials and business figures whose continued support for the Islamic Republic depends on financial privileges and access to international markets.
Earlier sanctions had often pushed legitimate commerce underground while allowing networks connected to the Revolutionary Guards to profit, Bitsoff said.
Machine-Chian described the emergence of wealthy intermediaries, sometimes called sanctions merchants, who benefited from moving Iranian oil and money through opaque arrangements.
Those networks subsequently became obstacles to negotiations and economic normalization because their commercial interests depended on maintaining the existing system, he said.
Machine-Chian distinguished between sanctions that impose prolonged hardship without producing results and measures designed to achieve specific objectives within a foreseeable period.
The loss of the UAE, Machine-Chian added, as a major commercial and financial intermediary has further complicated Iran's position.
Dubai previously provided an important channel for Iranian transactions, but restrictions have forced businesses to seek alternatives through Turkey, Pakistan and Afghanistan, Machine-Chian said.
Those routes, he said, have limited capacity and cannot quickly replace the financial infrastructure previously available through the Emirates.
China and regional allies face financial constraints
China remains Iran's principal oil customer, but its commercial relationship offers fewer advantages to the Islamic Republic than commonly assumed, Bitsoff said.
Independent Chinese refineries purchase Iranian crude at substantial discounts, while payments in yuan often remain in China and are largely available for purchasing Chinese goods.
Major Chinese banks generally avoid Iranian transactions, leaving smaller intermediaries to facilitate much of the remaining trade, she said.
The blockade also allows Washington to restrict Iranian oil exports without directly confronting major Chinese financial institutions, Clawson said.
Targeting those institutions could provoke Chinese retaliation affecting broader US economic interests.
The financial pressure is also affecting Iran's regional allies.
Hezbollah has struggled to maintain basic financial obligations and social support programs since the blockade began, Bitsoff said.
Machine-Chian argued that Iran's relationships with allied armed groups had become increasingly transactional, making continued financial assistance essential to sustaining their loyalty.
Political survival and prospects for negotiations
Despite the mounting pressure, the panelists differed over whether the Islamic Republic would ultimately accept Washington's demands.
Economic hardship alone was unlikely to persuade Iran's leadership to abandon its objectives, Bitsoff said.
Instead sustained pressure could influence members of the security apparatus whose loyalty depends on salaries, privileges and expectations of continued stability.
Clawson considered negotiated concessions possible, pointing to previous occasions when Iran reversed positions it had presented as nonnegotiable.
He suggested Iran could accept a three-year suspension of uranium enrichment, particularly because its facilities had been damaged and were not operational.
Machine-Chian was more skeptical, arguing that abandoning regional ambitions and nuclear objectives would challenge central elements of the Islamic Republic's political identity.
The blockade's sustainability also remains a concern because maintaining naval operations places substantial demands on American ships, crews and maintenance resources, Bitsoff said, although she expected the operation to continue.
The discussion highlighted a central uncertainty: whether sustained economic pressure will produce concessions, weaken the leadership's support structures or prolong Iran's economic difficulties without fundamentally changing its political direction.
The cost of transporting goods from Turkish ports to Iran has surged over fivefold in less than two months to about $8,000, Iranian media reported, as Washington pressures Turkey to help cut off Iran's overland trade routes to further isolate Tehran economically.
The US naval blockade of Iranian ports has forced Tehran to rely more heavily on land borders to secure essential imports and maintain trade flows, placing increasing strain on transportation networks already struggling with congestion and limited capacity.
Fars News Agency reported Saturday that freight charges from Turkish ports to Iran had climbed from approximately $1,500 to $8,000 in less than two months, adding to the cost of importing goods into the country.
Ehsan Malekzadeh, chairman of Iran's Association of International Transport Companies, told Mehr News Agency that freight rates had reached $7,900 to $8,000, partly because prolonged border delays had created a shortage of trucks available to transport goods into Iran.
Approximately 8,000 trucks are currently stranded at the Bazargan border crossing with Turkey, while Iranian drivers at the Rimdan crossing with Pakistan face delays of 20 to 25 days, according to Fars.
The closure of the nearby Mirjaveh crossing and inadequate infrastructure at Rimdan have compounded the congestion. Each stranded truck incurs an estimated $175 in daily costs, potentially adding thousands of dollars to transportation expenses.
Malekzadeh warned that the disruption was driving up import costs while undermining Iranian exporters' competitiveness, with some export markets already lost.
He said transportation, insurance and related logistics expenses previously accounted for no more than approximately 10 percent of a shipment's value, but now substantially exceeded that benchmark.
Iranian trade officials have previously warned that overland routes cannot fully replace maritime imports.
In August, Davoud Rangi, vice chairman of the Iran Chamber of Commerce's Import Management Committee, estimated that replacing the cargo of a single ship carrying essential goods would require approximately 2,500 trucks.
He warned that land routes through Turkey and Pakistan lacked the capacity to accommodate the volume of goods previously arriving through Iran's southern ports, while transportation costs would rise sharply.
US Treasury Secretary Scott Bessent told Newsmax on Thursday that Washington was working with Turkey and Pakistan to "cut off all the land routes" into Iran, while describing the United Arab Emirates and Oman as partners in the broader economic pressure campaign.
"We did have a maximum pressure campaign. Now we have an absolute isolation campaign and it's working," Bessent said, referring to Washington's expanding efforts under Operation Economic Outcast.
