US sanctions ‘extensive shadow banking network’ supporting Iran’s military

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WASHINGTON – The United States Department of the Treasury has announced economic sanctions on 50 individuals and firms across Hong Kong, the United Arab Emirates, and the Marshall Islands, claiming they have been operating as a “sprawling shadow banking network” for Iran’s military.

On Tuesday, the Treasury’s Office of Foreign Assets Control stated that these entities and individuals are involved in the sale of Iranian oil and petrochemicals, which have enabled Iran’s military and government to gain illicit access to the international financial system.

The income funds weapons and proxy groups, including Yemen’s Houthis, as well as drone transfers to Russia, the Treasury said.

Iran is accused of supplying Russia with drones used to bomb Ukrainian civilians as the Kremlin continues its invasion of Ukraine.

The sanctions target Seyyed Mohammad Mosanna’i Najibi, an Iranian-Turkish money changer, 27 cover companies controlled by Najibi based in Hong Kong, the , and the Marshall Islands, and a Tehran-based currency exchange business, among others.

An AP inquiry through the Iranian branch of Najibi’s company, Sadaf Exchange, was not immediately answered.

The sanctions deny the individuals and firms access to any property or financial assets held in the US and prevent US companies and citizens from doing business with them.

Treasury Deputy Secretary Wally Adeyemo said the US “will continue to pursue those who seek to finance Iran’s destabilising terrorist activities. 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.”

The US has already sanctioned what it claims are Iranian shadow banking businesses. In March 2023, the US imposed economic sanctions on 39 firms it said were linked to a shadow banking system that helped to obfuscate financial activity between sanctioned Iranian firms and their foreign buyers, namely for petrochemicals produced in Iran.

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