US tightens its crackdown on Iran’s revenue streams
The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has sanctioned scores of Iranian businesses in the automotive, metals, mining and banking sectors (16 October). The US Financial Crimes Enforcement Network (‘FinCEN’) has also issued an advisory alerting foreign financial institutions to ‘deceptive’ practices by Iran (11 October).
OFAC’s designation of 20 entities target a substantial network of Iranian businesses it claims provide financial support to the Basji Resistance Force (‘Basji’), a domestic paramilitary organisation linked to Iran’s Islamic Revolutionary Guards Corp (‘IRGC’). The sanctioned businesses include the Iran Tractor Manufacturing Company (‘ITMC’), the largest tractor manufacturer in the Middle East and North Africa; Iran’s Zinc Mines Development Company (‘IZMDC’), a multibillion-dollar zinc and lead mining company, responsible for several subsidiary mining, smelting, and mineral production operations; and Esfehan’s Mobarakeh Steel Company, the largest steel maker in the Middle East and North Africa.
The sanctioned entities have been designated as Specially Designated Global Terrorists (‘SDGTs’) under Executive Order 13224, which targets terrorists and those providing support to terrorists or acts of terrorism.
FinCEN’s advisory is aimed at foreign financial institutions, so that they ‘better understand the obligations of their US correspondents, to avoid exposure to US sanctions, and to address the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) risks that Iranian activity poses to the international financial system.’ It describes the financial strategies used by Iran to evade sanctions, including front companies, fraudulent documents, exchange houses and ostensibly legitimate businesses and government officials. The advisory provides ‘red flag indicators’ to enable the detection of ‘specific malign activities’.
OFAC’s notice can be found here:
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20181016.aspx
The FinCEN advisory can be found here:
https://www.fincen.gov/sites/default/files/advisory/2018-10-11/Iran%20Advisory%20FINAL%20508.pdf
The US Treasury’s press release on recent Iran designations can be found here:
https://home.treasury.gov/news/press-releases/sm507
