On June 25, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control designated 4 individuals and 44 entities for being members of a widespread “shadow banking” network that has reportedly moved billions of dollars for Iran’s military since 2020. According to OFAC, the network has been used by Iran’s Ministry of Defense and Armed Forces Logistics (“MODAFL”) and Islamic Revolutionary Guard Corps (“IRGC”) to facilitate several commercial revenue-generating activities, including the sale of Iranian oil and petrochemicals. The Islamic Revolutionary Guard Corps-Qods Force (“IRGC-QF”) has been designated in United States since 2007 for supporting multiple terrorist groups, while the MODAFL has been designated since 2019 for supporting the IRGC-QF. OFAC reported that the revenue generated by the network has been used to procure and develop advanced weapons such as unmanned aerial vehicles (“UAVs”), some of which have been transferred to Russia for use in its war against Ukraine. Iran has also allegedly used the revenue to support regional proxy groups, including the Houthis in Yemen and their ongoing attacks on commercial vessels in the Red Sea and Gulf of Aden.
The designees include several Iranian exchange houses and foreign cover companies in locations such as Hong Kong, the United Arab Emirates, and the Marshall Islands, that have been used by the MODAFL and IRGC to launder billions of dollars in illicit oil and petrochemical transactions and hundreds of millions of dollars in cash and gold transfers between Türkiye and Iran. The sanctions were imposed pursuant to Executive Order 13224, as amended, which targets terrorist groups and their supporters. As a result of these designations, all property and interests in property of the designated persons within the United States or within the possession or control of a U.S. person are blocked, and U.S. persons are generally prohibited from engaging in transactions involving a designated person. Entities owned 50 percent or more by one or more blocked persons are also blocked.