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WASHINGTON — The Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions today on nearly 50 entities and individuals connected to a "shadow banking" network used by Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and Islamic Revolutionary Guard Corps (IRGC). This network has facilitated illicit access to the international financial system, processing billions of dollars since 2020.
The MODAFL and IRGC engage in commercial activities such as selling Iranian oil and petrochemicals. Networks of Iranian exchange houses and foreign cover companies enable these organizations to disguise revenue generated abroad. This revenue supports various activities, including procuring advanced weapons systems like unmanned aerial vehicles, funding regional proxy groups such as Yemen’s Houthis, and transferring UAVs to Russia for use in its conflict with Ukraine.
"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," stated Deputy Secretary of the Treasury Wally Adeyemo. "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."
Today’s action falls under Executive Order (E.O.) 13224, as amended. OFAC previously designated MODAFL on March 26, 2019, for supporting the IRGC-Qods Force (IRGC-QF), which was itself designated on October 25, 2007.
In March 2023, OFAC targeted entities within an Iranian shadow banking network moving billions from petrochemical sales for the regime. In May 2024, FinCEN issued an advisory detailing IRGC's methods for financing its partners like Hamas, Hizballah, and the Houthis.
Shadow banking networks grant sanctioned Iranian entities access to international financial systems while obscuring their trade with foreign customers. For example, MODAFL uses exchange houses in Iran managing cover companies registered in jurisdictions like Hong Kong or UAE to launder foreign commercial activity revenue into clean currency. These funds are then used for weapons procurement.
Seyyed Mohammad Mosanna’i Najibi manages several currency exchange businesses facilitating bypasses around U.S. and European sanctions on Iran through his company Sadaf Exchange. Najibi conducts transactions across Türkiye, China, Marshall Islands, UAE using these businesses.
Other entities targeted include Omid Sepah Exchange Company & Hekmat Iranian Exchange House controlled by Bank Sepah; numerous cover companies based in Hong Kong; UAE-based Mufflin Trading L.L.C., Colwich Trading L.L.C., Long Worth Goods Wholesalers L.L.C.; Ramin Jalalian's front companies Piera Global Trading L.L.C., Astoria Star Heavy Equipment Trading L.L.C.; Siavash Nourian's exchange house Siavash Nourian & Co.; Seyyed Reza Mir Mohammad Ali's Atropars Company.
Asadollah Seifi continues his involvement in sanctions evasion schemes through shell companies based in UAE supporting MODAFL Supply Division operations.
These designations mean all property owned by these individuals or entities within U.S. jurisdiction is blocked. Financial institutions engaging with them may face sanctions or enforcement actions themselves.
OFAC emphasizes that the goal is not punishment but behavioral change consistent with legal requirements for removal from sanction lists.
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