The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) on May 11 issued an alert to financial institutions warning them of efforts by the Iranian Islamic Revolutionary Guard Corps (IRGC) to evade sanctions.
FinCEN said in a statement that the IRGC has been facilitating and laundering the proceeds of illicit oil sales using networks of financial facilitators and shell companies. The alert provides red flags on the IRGC’s oil smuggling, digital assets, and front-company abuse to aid financial institutions in detecting and reporting suspicious activity, the statement said.
Treasury Secretary Scott Bessent said that financial institutions have a responsibility to stop this activity.
“Degraded by Economic Fury, the Iranian military is desperately trying to fund its weapons programs and terrorist proxies,” Bessent said.
“Treasury will continue to deny the Islamic Revolutionary Guard Corps access to the financial networks it exploits to fund its terrorist acts. Financial institutions should be on notice that they have a responsibility to detect suspicious activity and stop it in its tracks.”
The Treasury network describes the IRGC as a parallel organization to Tehran’s regular armed forces, which reports directly to the leader, Ayatollah Mojtaba Khamenei. The IRGC is a U.S.-designated foreign terrorist organization.
Shadow Banking
FinCEN says the IRGC can make money from oil sales by misrepresenting its commercial activities. It smuggles oil using a “shadow fleet” of vessels that operate outside normal maritime rules and are often owned and operated by companies outside Iran.
Proceeds are then laundered through “shadow banking” networks to sell their oil and commodities abroad.
“By using front company accounts outside Iran to receive and remit payments, sanctioned entities like the IRGC are able to conduct transactions through the international financial system without repatriating funds to Iran,” FinCEN said.
The network says that with these proceeds, Iran can fund the procurement and development of weapons, as well as fund terrorist activity abroad.
Hellbound and Down 