The United States Department of the Treasury has declared economic sanctions on 50 individuals and companies across Hong Kong, the United Arab Emirates, and the Marshall Islands, purportedly part of a "sprawling shadow banking network" supporting Iran's military.

Revenue for Weapons and Proxy Groups

According to the Treasury’s Office of Foreign Assets Control, these entities and persons are engaged in trading Iranian oil and petrochemicals, funneling funds to Iran’s military and government to access the international financial system unlawfully.

The earnings from these activities are allegedly financing weapons procurement and supporting proxy groups like Yemen’s Houthis. Iran is also accused of supplying drones to Russia, used in attacks on Ukrainian civilians during the ongoing invasion of Ukraine.

Those sanctioned include Seyyed Mohammad Mosanna’i Najibi, an Iranian-Turkish money-changer, along with 27 front companies controlled by Najibi in different locations, and a currency exchange business in Tehran among others.

The sanctions involve freezing any US-held financial assets or property belonging to the sanctioned individuals or entities, and prohibiting US entities and citizens from conducting business with them.

Treasury Deputy Secretary Wally Adeyemo emphasized the US's commitment to combatting the financing of Iran's terror activities, collaborating with partners to heighten vigilance against funds supporting terrorism.

Previous Sanctions

Prior to this, the US had sanctioned Iranian shadow banking entities. In March 2023, economic sanctions were imposed on 39 firms allegedly connected to a shadow banking system that facilitated obscured financial transactions between sanctioned Iranian companies and their foreign purchasers, primarily in the petrochemical sector.