Washington: Today, the Department of the Treasury's Office of Foreign Assets Control (OFAC) announced the designation of two Iranian financial facilitators and over a dozen individuals and entities based in Hong Kong and the United Arab Emirates (UAE). These designations are part of efforts to disrupt financial networks that facilitate funds transfers benefiting the IRGC-Qods Force (QF) and Iran's Ministry of Defense and Armed Forces Logistics (MODAFL). The networks operate through shadow banking activities, which involve laundering money via overseas front companies and cryptocurrency to evade sanctions. The proceeds support regional terrorist groups and the development of advanced weapons systems, posing a security threat to U.S. forces and allies.
According to U.S. Department of the Treasury, shadow banking networks are crucial for Iranian entities to bypass sanctions and channel millions through the global financial system. John K. Hurley, Under Secretary of the Treasury for Terrorism and Financial Intelligence, emphasized the administration's commitment to interrupting these financial streams under President Trump's leadership. This move is part of a broader campaign to apply maximum pressure on Iran, following Executive Order (E.O.) 13224 and subsequent actions targeting Iran's financial infrastructure.
The designations align with Executive Order (E.O.) 13224, marking the second wave of sanctions since the issuance of National Security Presidential Memorandum 2. The IRGC-QF and MODAFL have been previously targeted for their support to terrorist organizations and weapons development. OFAC has previously acted against similar networks, such as those involving the Zarginhalam brothers, which laundered billions for Iranian entities.
Alireza Derakhshan and Arash Estaki Alivand are newly designated for their roles in aiding the IRGC-QF. Derakhshan is linked to numerous UAE- and Hong Kong-based front companies, which handle substantial transactions facilitating illicit fund flows for MODAFL and the IRGC.
The sanctions entail blocking property and interests of designated persons within the U.S. or under U.S. control. Transactions involving these blocked persons are generally prohibited unless authorized by OFAC. Violations may attract civil or criminal penalties, and foreign financial institutions engaging with designated persons risk secondary sanctions.
OFAC's enforcement of sanctions aims to induce behavioral changes rather than merely penalize, with mechanisms in place for designated persons to seek removal from sanctions lists. These actions demonstrate OFAC's commitment to maintaining national security by mitigating financial support for activities threatening the U.S. and its allies.
