December 3, 2023

OFAC designates financial facilitation networks that support the Iranian military

The US Department of the Treasury’s Office of Foreign Assets Control recently designated more than 20 individuals and entities for providing financial support for the benefit of Iranian military entities such as Iran’s Ministry of Defense and Armed Forces Logistics (“MODAFL”), the Iranian Armed Forces General Staff (“AFGS”), and the Islamic Revolutionary Guard Corps-Qods Force (“IRGC-QF”).  The MODAFL was designated by the US in 2019 for supporting the IRGC-QF, and the IRGC-QF has been designated in the US since 2007.  Both entities were designated pursuant to EO 13224, as amended, which targets terrorists, their organizations and leaders, and those who provide support to engage in actions of terrorism.  According to OFAC, the new designees are members of networks comprised mostly of foreign-based front companies, their employees and executives who were enlisted by the MODAFL, the AFGS and the IRGC-QF to sell commodities overseas in an effort to fund destabilizing activities and multiple regional proxy groups, including Hamas and Hizballah.

All of the new designations were issued by OFAC pursuant to EO 13224, as amended.  Among the designees is Sepehr Energy Jahan Nama Pars Company, the company that oversees the selling of commodities for the AFGS.  According to OFAC, Sepehr Energy has sold billions of dollars in commodities, including Iranian light crude oil, to customers in Europe and East Asia using front companies in Hong Kong and the United Arab Emirates.  Other designees include Majid A’zami, the head of Sepehr Energy who is also an Iranian oil ministry official and the Pishro Tejarat Sana Company, a company that allegedly sells and ships commodities to overseas buyers in exchange for a portion of the profits.  Several members of a separate network of front companies and brokers based in the UAE and Singapore were designated for enabling illicit financing that generated funds for the IRGC-QF.  These designations include Zabi Vahap and UAE-based Transmart DMCC, a company owned by Vahab that has allegedly laundered tens of millions of dollars for the benefit of the IRGC-QF.

As a result of these sanctions, all property and interests in property of the designated persons within the United States or within the possession or control of a US person are blocked, and US persons are generally prohibited from engaging in transactions involving a designated person.  In addition, entities owned 50 percent or more by one or more blocked persons are also blocked.

Department of Treasury Press Release