US slaps sanctions on Iran’s ‘shadow banking’ network

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The administration of President Joe Biden has targeted an alleged “shadow banking network” for the Iranian military

The US government has cracked down on nearly 50 organizations and individuals accused of handling money transfers for Tehran, imposing sanctions against what it called a “sprawling shadow banking network” for the Iranian military.

The US Treasury Department announced the new sanctions on Tuesday, saying the targeted entities had moved around billions of dollars for the Iranian Defense Ministry and the Islamic Revolutionary Guard Corps (IRGC) since 2020. The network allegedly gave Iran’s military forces access to the international financial system, in violation of US sanctions.

Much of the money in question was generated by Iranian oil and petrochemical sales. The revenue was disguised through a network of exchange houses and “foreign cover companies,” then was made available to the Iranian military, the Treasury Department said in a statement. It was used for such purposes as buying weapons and funding affiliated militant groups, such as the Houthi rebels in Yemen.

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“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 Treasury Secretary Wally Adeyemo said in the statement. He added, “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.”

Iran’s diplomatic mission to the United Nations responded to the latest sanctions by accusing Washington of waging “economic war” against Tehran. “They have attacked, and we are defending ourselves accordingly,” the mission said. “The outcome of this economic war will be determined by the strength of will, not by the capabilities of imposing sanctions.”

Dozens of companies in Hong Kong, the United Arab Emirates, Türkiye and the Marshall Islands were targeted with the latest anti-Iran sanctions. The measures freeze the US assets of banned entities and bar US citizens from doing business with them.

The Treasury Department said firms registered in such locales as Hong Kong and the UAE moved oil revenue for an Iranian front company, called Sahara Thunder. Earlier this year, the US imposed sanctions against Sahara Thunder, saying it was overseeing commercial activities for the Iranian Defense Ministry in support of the IRGC and Russia’s military operations in Ukraine.

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