InfoBytes Blog
OFAC sanctions “shadow banking” network responsible for moving billions for Iranian regime
On March 9, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against “39 entities constituting a significant ‘shadow banking’ network,” pursuant to Executive Order 13846. OFAC explained that this network is “one of several multi-jurisdictional illicit finance systems,” which grants sanctioned Iranian entities access to the international financial system and obfuscates sanctioned entities’ trade with foreign customers. “Iran cultivates complex sanctions evasion networks where foreign buyers, exchange houses, and dozens of front companies cooperatively help sanctioned Iranian companies to continue to trade,” Deputy Secretary of the Treasury Wally Adeyemo said in the announcement. “Today’s action demonstrates the United States’ commitment to enforcing our sanctions and our ability to disrupt Iran’s foreign financial networks, which it uses to launder funds.” The action follows previous designations of six Iran-based petrochemical manufacturers or their subsidiaries, as well as three firms located in Malaysia and Singapore, for their involvement in the sale and shipment of petroleum and petrochemicals on behalf of a previously designated company (covered by InfoBytes here).
As a result of the sanctions, all property interests belonging to the sanctioned targets subject to U.S. jurisdiction are blocked and must be reported to OFAC. Additionally, “any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.” U.S. persons are also generally prohibited from engaging in any dealings involving the property or interests in property of blocked or designated persons. Persons that engage in certain transactions with the individuals or entities designated today may themselves be exposed to sanctions or subject to enforcement. Additionally, OFAC warned that “any foreign financial institution that knowingly facilitates a significant transaction for any of the individuals or entities designated today could be subject to U.S. sanctions” unless an exception applies.