In a move to disrupt Iran's illicit financial activities, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has sanctioned more than 20 entities and individuals. The targets include those involved in financial facilitation networks benefiting Iran's Ministry of Defense and Armed Forces Logistics (MODAFL), Iranian Armed Forces General Staff (AFGS), and the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF).

The sanctions are a response to Iran's extensive commodity sales, primarily in the form of oil, which generate billions of dollars used to fund destabilizing regional activities and support proxy groups like Hamas and Hezbollah. To enable these illicit commercial activities, MODAFL, AFGS, and the IRGC-QF employ complex networks of foreign-based front companies and brokers, exploiting the international financial system.

Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, highlighted the ongoing engagement of the IRGC-QF and MODAFL in illicit finance schemes that fuel conflicts and spread terror in the region. The United States remains committed to uncovering elements of the Iranian military and their complicit partners abroad to disrupt this critical source of funds.

Today's actions are in line with counterterrorism authority Executive Order (E.O.) 13224, as amended. MODAFL was previously designated under this order on March 26, 2019, for its support to the IRGC-QF, while the IRGC-QF itself was designated on October 25, 2007.

The Iranian military's illicit finance scheme involves allocating billions of dollars' worth of commodities, including oil, to entities such as MODAFL and AFGS as part of their annual budgets. These commodities are then sold to foreign buyers to generate revenue. Sepehr Energy Jahan Nama Pars Company oversees the sale of commodities for AFGS, with Elyas Niroomand Toomaj arranging deals, including through the use of falsified certificates of origin.

In transferring funds to MODAFL-controlled bank accounts, Sepehr Energy relies on Iranian exchange houses, which play a crucial role in establishing front companies abroad for Iranian clients. Additionally, Sepehr Energy utilizes the services of the National Iranian Tanker Company (NITC) for shipping products. NITC was previously designated under E.O. 13224 for its support to the IRGC-QF.

Iran-based Pishro Tejarat Sana Company works alongside Sepehr Energy to facilitate the sale and shipment of commodities, generating revenue for MODAFL and the Iranian military. Seyyed Abdoljavad Alavi is the chairman of the board of directors of Pishro Tejarat.

Foreign entities were also found to be complicit in enabling the Iranian military's revenue generation. Sepehr Energy utilized companies in Hong Kong and the United Arab Emirates (UAE) to sell commodities worth billions of dollars to customers in Europe and East Asia.

Notable transactions include Sepehr Energy's sale of condensate to HK Sihang Haochen Trading Limited through Puyuan Trade Co., Limited. To disguise the origin of Iranian goods, the sale was marketed as Malaysian-origin. Sepehr Energy also agreed to sell millions of barrels of Iranian light crude oil to Unique Performance General Trading L.L.C in Dubai for delivery to customers in China.

Dubai-based OPG Global General Trading Co. L.L.C and JEP Petrochemical Trading L.L.C were involved in the sale of Iranian crude oil and gasoline to customers in Oman and Europe. Dubai-based Future Energy Trading L.L.C facilitated the purchase of Iranian oil from Sepehr Energy by JEP Petrochemical.

Furthermore, the IRGC-QF utilized foreign-based front companies and brokers for its illicit financing. A vast illicit oil sales network overseen by Turkish businessman Sitki Ayan worked in tandem with senior IRGC-QF officials to generate revenue. CGN Trade FZE, based in the UAE, played a critical role in this network and was previously designated under E.O. 13224. The business operations of CGN Trade were later transferred to UAE-based Transmart DMCC, which also supports illicit financial networks for the IRGC-QF.

As a result of these sanctions, all assets and interests in the United States or under the control of U.S. persons belonging to the designated entities and individuals must be reported to OFAC. Financial institutions and other entities engaging in transactions with these sanctioned parties may face sanctions or enforcement actions.

The United States remains committed to utilizing sanctions to encourage positive changes in behavior.