OFAC Sanctions Currency Exchanges, Cover Companies Used by Iran
The Office of Foreign Assets Control this week sanctioned about 50 entities and people, including a “sprawling” shadow banking network, used by Iran’s military to access the international financial system. Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL) and the Islamic Revolutionary Guard Corps have used the network to process billions of dollars since 2020, OFAC said, and use various exchange houses and foreign “cover companies” to “disguise the revenue they generate abroad,” which they then use to buy and develop advanced weapons systems.
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The agency said the shadow banking networks are composed of “multi-jurisdictional illicit finance systems,” which help sanctioned Iranian entities access international banks and disguise their trades with foreign customers. Iran’s MODAFL specifically uses exchange houses in Iran that manage cover companies registered in “permissive jurisdictions,” such as Hong Kong or the United Arab Emirates, to launder money generated through commercial oil sales abroad. Those cover companies then use the laundered money to buy weapons parts and other defense items.
OFAC sanctioned various currency exchange businesses and a range of cover companies that it said have helped hide MODAFL “international financial activity,” including 27 firms based in Hong Kong, the UAE and the Marshall Islands. These companies have “collectively moved hundreds of millions" of dollars' worth of revenue “for MODAFL related to oil and petrochemical sales or foreign currency exchange operations,” the agency said.
The agency also sanctioned Seyyed Mohammad Mosanna’i Najibi, an Iranian-Turkish money-changer and his businesses; a UAE-based currency exchange network run by Iranian money-changer Asadollah Seifi; a UAE- and Hong Kong-based network run by Iranian Ramin Jalalian; another network run by Siavash Nourian, owner of Iranian exchange house Siavash Nourian & Co. Exchange; and others.