June 26, 2024 | Flash Brief

U.S. Sanctions Banking Network Transferring Billions for Iran’s Military

June 26, 2024 | Flash Brief

U.S. Sanctions Banking Network Transferring Billions for Iran’s Military

Latest Developments

The United States sanctioned nearly 50 individuals and entities that comprise branches of a “shadow banking” network processing billions of dollars for Iran’s military on June 25. In particular, the money is funneled to Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and Islamic Revolutionary Guard Corps (IRGC), both already sanctioned by Washington. The new sanctions target individuals and entities in several locations, including Hong Kong, the United Arab Emirates, Turkey, the Marshall Islands, and Iran itself.

The U.S. Department of the Treasury described shadow banking networks as “multi-jurisdictional illicit finance systems which grant sanctioned Iranian entities access to the international financial system and obfuscate their trade with foreign customers.” Treasury noted that subsidiaries of MODAFL “manufacture advanced conventional weapons, including ballistic missiles and unmanned aerial vehicles, which are used by Iran’s military, including the IRGC, or exported to other countries such as Russia,” as well as “partner groups” such as the Houthi rebels in Yemen.

Expert Analysis

“This appears to be a robust sanctions enforcement action that remains fundamentally undermined by a broader sanctions relief policy.” — Richard Goldberg, FDD Senior Advisor

“The dedicated individuals at the Treasury Department work diligently to identify and designate Tehran’s extensive network of money laundering front companies and disrupt their harmful activities. Their efforts deserve recognition. However, it is crucial for the U.S. administration to make the political decision to treat the financiers of the IRGC, the largest terrorist organization in the world, as terrorists. We should handle IRGC financiers in the same manner we have addressed ISIS or Al-Qaeda financiers.” — Saeed Ghasseminejad, FDD Senior Iran and Financial Economics Advisor

“As more of the regime’s transnational money laundering operations are revealed, the effectiveness of new U.S. sanctions requires rigorous enforcement. China, Turkey, and the UAE enable the Islamic Republic’s sanctions evasion schemes, partially due to the Biden administration’s reluctance to meaningfully exert pressure on these countries’ financial and legal systems.” — Janatan Sayeh, FDD Research Analyst

The Targets

The targets of the fresh sanctions include Seyyed Mohammad Mosanna’i Najibi, an Iranian-Turkish money changer, and his business, the Sadaf Exchange. According to Treasury, Najibi worked with “top MODAFL officials to execute transfers of U.S. dollars to bank accounts in the People’s Republic of China, the Marshall Islands, Türkiye, and the UAE on their behalf, including transfers related to MODAFL cargo shipments.” Treasury also sanctioned 27 cover companies that Najibi controls, which aim to “obfuscate the MODAFL Supply Division’s international financial activity.”

Likewise, Washington sanctioned Iranian money changer Asadollah Seifi and five companies he controls for developing schemes, in conjunction with MODAFL, to evade U.S. and European sanctions on Iran. Iranian currency exchanger Ramin Jalalian and three companies he controls received sanction designations as well for similar reasons. In addition, Treasury sanctioned Siavash Nourian, the owner of an Iranian exchange house known as the Nourian Exchange, and three companies they control for “numerous transfers worth tens of millions of dollars on behalf of the MODAFL Supply Division and the IRGC Oil Command.”

Finally, the United States sanctioned Seyyed Reza Mir Mohammad Ali, CEO and owner of another Iran-based exchange house known as the Atropars Company, which the MODAFL Supply Division has used for financial activity outside Iran.

U.S. Sanctions Iranian Entities for Helping Russia Build Drones,” FDD Flash Brief

Iran Reportedly Used UK Banks to Evade U.S. Sanctions,” FDD Flash Brief

Bipartisan Coalitions Urge Biden to Resume Enforcement of Iran Oil Sanctions,” by Saeed Ghasseminejad


Iran Iran Sanctions Sanctions and Illicit Finance