U.S. Treasury Department Sanctions ‘Sprawling’ Shadow-Banking Network for Supporting Iranian Regime

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) on Tuesday sanctioned almost 50 parts of a “sprawling ‘shadow banking’ network” used by the Iranian military and the Islamic Revolutionary Guard Corps (IRGC) to support the Iranian regime.

“The United States is taking action against a vast shadow banking system used by Iran’s military to launder billions of dollars of oil proceeds and other illicit revenue,” Deputy Secretary of the Treasury Wally Adeyemo said. “We have sanctioned hundreds of targets involved in Iran’s illicit oil and petrochemical-related activity since President Biden took office, and we will continue to pursue those who seek to finance Iran’s destabilizing terrorist activities. We continue to work with allies and partners, as well as the global financial industry, to increase vigilance against the movement of funds supporting terrorism.”

The network “enable[s] MODAFL [Iran’s Ministry of Defense and Armed Forces Logistics] and the IRGC to disguise the revenue they generate abroad,” revenue which has supported “the provision of weapons and funding to Iran’s regional proxy groups, including Yemen’s Houthis.”

Houthis have been attacking shipping routes in the Middle East since November, in stated solidarity with the terrorist group that attacked Israel on October 7, Hamas.

Iran also uses profits from the network’s individuals and firms, located in Iran, Turkey, Hong Kong, the United Arab Emirates, and the Marshall Islands, to “advance a wide range of destabilizing activities, including terrorism, lethal plotting, and transnational repression; the development, procurement and proliferation of advanced weapons systems; extensive human rights abuses; and nuclear activities that lack any credible peaceful purpose,” the department said.

Representative Mike Lawler (R., N.Y.) called the sanctions “long overdue.”

“There is still much more work to be done, however, and I look forward to seeing the Biden Administration take further steps to implement these sanctions and hold both Iran and its enablers accountable,” he said in a statement.

At an Iranian presidential debate on Monday, candidates agreed that lifting Western sanctions on Iran was a priority. Saeed Jalili said that Iran should “make the enemy regretful,” and current vice president Amir Hossein Ghazizadeh Hashemi said that if President Donald Trump wins in November, Iran “can negotiate with Trump and impose our demands on him.”